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Level 2
January 22, 2024
Question

As a FICA exempt (student work) adding my W-2 half's my Fed & State refund. Wife has a regular job. Is there something we have to do so we don't get dinged by this?

  • January 22, 2024
  • 4 replies
  • 16 views
I am entering my W-2 and I was a FICA exempt employee (Student working at the school I go to). Social Security and Medicare were not withheld from my paycheck. However when I  enter in my W-2 it reduces my Federal and State refund by half. My wife has a regular job  and taxes were withheld as normal. Is there something special I have to do so we don't get dinged by this?

4 replies

Level 15
January 22, 2024

No.

 

This is how tax works. Your W-2 earnings are taxable, and if there is not enough withholding taxes, your tax refund is reduced.

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dnmatijasAuthor
Level 2
January 22, 2024

That seems odd given that the wages in question are exempt. Why would they count towards taxable income for those categories? 

DoninGA
Level 15
Level 15
January 22, 2024

The wages are exempt for Social Security and Medicare taxes, Not for federal income taxes.