That depends on whether the excess withholding was the result of having multiple employers each withholding the correct percentage but when added together exceeds the maximum withholding amount, or if it was the result of having a single employer withhold too much.
If multiple employers are involved the process is simpler. For tax year 2022, you'll have excess Social Security withholdings if the sum of multiple employers' withholdings exceeds $9,114.00 per taxpayer. You don't need to take any action. TurboTax will automatically add the excess to your federal refund or subtract it from federal taxes you owe, whichever applies. The excess will appear as a tax credit on Line 11 of your Form 1040, Schedule 3.
If a single employer is involved the process a somewhat more complicated. As noted herein, your employer is supposed to withhold 6.2% of your Social Security Wages (the Box 3 amount on your W-2), up to a maximum of $9,114.00 per taxpayer for tax year 2022.
If the one employer withheld too much Social Security tax, you won't be able to take a credit for the excess on your tax return.
TurboTax determines whether the amount of social security withholding is too much by looking at your employer's EIN. In unusual cases where the employer changed their EIN during the tax year, an excess withholding credit can be taken as explained herein involving multiple employers.
So, if your employer withheld too much, contact them and ask for:
- A refund for the excess amount, and
- A corrected W-2 (also called a W-2c) which shows the correct Box 3 and Box 4 amounts.
Do not file with excess withholdings on your return, as you may be subjected to penalties and interest.
If your employer will not cooperate, you can correct the Box 4 amount yourself before filing. Simply multiply the amount in Box 3 by a factor of 0.062 and enter that amount or 9,114.00 (whichever is less) in Box 4.
To get a refund for the excess withholding, fill out IRS Form 843: Claim for Refund and Request for Abatement according to the Form 843 Instructions and mail it in separately. Make a copy to keep with your tax return paperwork.
@scottabishop
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