The scenario we are talking about here is not just an employer randomly withholding too much Social Security tax. The specific case this thread is about is 1 PEO representing two different unrelated employers, withholding FICA tax on their behalf as if they were separate (and adding up to more than the annual limit), but producing a single W-2 with a single federal employer tax id.
The following is the description of my experience. I am sorry it won't help people who are trying to get this right the first time (I wish you success!)
In my case (this exact scenario: 1 PEO fronting two different employers in the same year), after TurboTax did not let me claim the overwithholding as a credit (on my 2018 return), things unfolded as follows:
- I filed the return the way TurboTax let me, and contacted the PEO asking them to reimburse me; they replied that they did everything right, and I should seek reimbursement from the IRS (they also refused to replace W-2 with 2 W-2s)
- I called the IRS hotline, and they told me that I had to file form 843 (rather than an amended return)
- I filed form 843 to request reimbursement; 8 months later I received a response that my request was incomplete, and I needed to attach my non-immigrant visa information (I am a US citizen)
- I engaged the taxpayer advocate service (the free service staffed with ex-IRS people) who steered me to file another form 843. That form went through the same path. At the end of the path my taxpayer advocate relayed an instruction from the IRS to file an amended return
- I filed an amended return in March 2021; I received the money owed to me from the IRS with interest in November 2021.
What I learned:
1. The IRS was clueless about this issue in 2019. It took me more than 2 hours to convince them over the phone back then that they owed me money, and then they gave me incorrect guidance (to file form 843). They are much less clueless now: the number of people in our boat over the last few years has been growing.
2. If you can get it right on the original tax return by all means do. It takes forever to correct the situation after the fact.
3. If you already filed the tax return and are trying to get your money back after that, filing form 843 is almost certainly not the right way to go (but remember, I am a civilian, not a tax attorney). An amended return almost certainly is.
