Does Turbo Tax automatically include credit for overpayment of social security tax or do I manually have to enter that info into my return?

[VolvoGirl]

Yes it is automatic.  If you had more than 1 employer and paid more than $9,114.00 in Social Security tax (box 4) combined you get the excess back on your tax return. If you are married it is for each spouse separately.

Get a calculator and check each W2 box 3&4. Multiply box 3 x .062 and it should be box 4. The max for all box 4 combined (but only for each person) is $9,114.00. Even one penny over from rounding will be excess. So leave off the cents! Or post back with the amounts in boxes 3&4.

Check 1040 Schedule 3 line 10 for it. Then Schedule 3 goes to 1040 line 31

Or are asking about the SE tax on your self employment?  

Turbo Tax figures it out for you. If you also have W2 income, you have to break out the Social Security and Medicare taxes. Only the Social Security part maxes out.

The SE tax includes what you already paid in from your W2 so your schedule SE tax will only be the difference up to the max amount of $9114.00 for social security. The max for social security is 6.2% of wages plus schedule C net profit  2022 the max is $147,000.  Medicare is 2.9% (both er & ee parts) of all wages & schedule C profit - no max.

In the Online version you have to download the whole pdf to your computer to see it. If you have the desktop program you can switch to forms mode, click Forms in the upper right (left for Mac) and open the schedule SE.

[GeorgeM777]

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:

1. A refund for the excess amount, and
2. 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

[keith2437]

My employer uses a Common Payer Agent. Based on the instructions from Turbo Tax, having two W-2's with the same EIN, but different employer names will automatically calculate the excess Social Security as a credit. The credit should appear on Schedule 3, line 11, but it does not work.

[SteamTrain]

@keith2437 

The only way I've seen to fix your situation, is to use the Desktop/download software......and entering the excess SS withheld in Forms Mode on the Schedule 3.

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[keith2437]

Thank you so much.....this worked!!!