Had two jobs but one W2 since employers used a PEO. Had too much social security withheld. TT won't let me amend Line 11/Sched3 since it thinks it's one job. How to fix?

[GeorgeM777]

TurboTax has addressed the issue about excess Social Security withholding in a recent article.  Here is part of that article which address your tax situation.

"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 $8,853.60 per taxpayer for tax year 2021.

If 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 this 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 in "Multiple employers," above.)

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.

What if my employer can't—or won't—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 8,853.60 (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."

Here is a link to the full article referenced above.

Refund of Excess Social Security tax withheld

@HubbaHubba

[mk1380]

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.

[Kawh]

Yes, Schedule 3, etc. What I wrote before is what I did. I do not see how the other "solutions" address the nuances with CPEOs given the government has acknowledged that this is not a single "employer". Repasting below from the Federal Register.

"The proposed regulations also provide that if, during a calendar year, a covered employee receives remuneration from a CPEO for services performed by the covered employee for more than one customer of the CPEO, the annual wage base and withholding threshold do not apply to the aggregate remuneration received by the covered employee from the CPEO for services performed for all such customers. Rather, the annual wage base and withholding threshold apply separately to the remuneration received by the covered employee from the CPEO with respect to services performed for each customer."

There is a larger explanation in the following link:

https://www.federalregister.gov/d/2019-10856/p-22

[HubbaHubba]

Thanks, @Kawh 

One last question: since you go through the route of Schedule 3 and not Form 843, did IRS accepted it and gave you a refund for the excess social security?

[catabyte]

Update on my own TriNet saga. Had the same experience as you. Filed form 843 and sent it off.

After periodic "we're working on it" letters, one year later (the IRS works so quickly), I got a denial. I appealed the denial and after another round of "we're working on it" letters and *another* year, I finally got my money back.

(The good news is that I *did* eventually get it back)

[Kawh]

Yes. Had to paper file. Got it refunded without complaint from them. I think that those who submitted the other form got denied for the reasons I posted before. 

[Joopkins]

Did you receive interest on what they owed you? What was the total time from when you originally sent in an 843 and actually got your money from the appeal?

I'm worried this is going to be a multi year ordeal and am curious if there's anything I should do, i.e. calling the IRS or a lawyer to speed this up.

[catabyte]

I think I did get interest, but I honestly can't remember.

I tried calling the IRS a few times but it mostly was an ordeal of a lengthy automated hold followed by "we're too busy now, call back later <click>" message, so I gave up.

My request was denied the first time (took them about a year for that), I appealed in writing and then a year after that got the approval and the funds back.

[Joopkins]

Got my denial for the 843 today, they basically responded as though I was requesting abatement of taxes instead of a refund for excess taxes withheld. Pretty infuriating, it seems so wrong that thousands of dollars can just be withheld and somehow they don't recognize it. Especially since it's just money withheld over a set limit.

[roymeo]

Same issue here with TriNet as the PEO.  They sent a letter explaining that (though I'm only going to get the single W-2 with one FEIN) they consider my 'real' companies the employers so they followed the advice to ignore overpaying the SocSec and that I have to file form 843 to get the money from the gov't not from them. They also sent along a letter to the gov't to put in with the form explaining why it's not on TriNet to give the money back.

[toastymctoastface]

have you had any luck with this yet?

I am in the same position and considering whether to follow the schedule 13 or the form 843 approach. Both seem to have serious downsides.

[Joopkins]

Just wanted to follow up with my experience. The 843 failed, they rejected it, completely disregarding that the form is can be for requesting a refund or for abatement of taxes owed. They acted like I was requesting abatement of taxes, not understanding at all that I was requesting obviously excess withholding to be refunded. 
I wound up paying a new accountant at a big tax firm in the neighborhood to handle the situation. They filed an amended return and claimed the excess witholding on line 10 of Schedule 3 (Form 1040). IRS has accepted this but I still haven't received my refund so, we're cruising well over than a year for resolution here. Pretty insane how much onus there is on the taxpayer to recoup something as simple as a limit being exceeded for a single thing.

[danC4]

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@Joopkins wrote:

I wound up paying a new accountant at a big tax firm in the neighborhood to handle the situation. They filed an amended return and claimed the excess witholding on line 10 of Schedule 3 (Form 1040). IRS has accepted this but I still haven't received my refund so, we're cruising well over than a year for resolution here.

I'm in the same situation here and going the Schedule 3 route for 2023. @Joopkins when you filed the amended return, do you know if you/your accountant manually changed the input for W2 for the SS wages / SS tax withheld or did you leave as is based on the w2 you received (with the extra amount / warning that TT gives)?

[AnnetteB6]

Take a look at the following TurboTax help article.  The section under 'single employer' gives you guidance about how to modify the entries on one of your W-2s so that the return may be filed.

Can I get a refund for excess Social Security tax withheld?
 

@danC4 

[danC4]

@AnnetteB6 thanks for the reply, but the article doesn't really talk about the issue in this thread. The issue is that we have one W2 but it's for multiple clients under a PEO (so one EIN). The PEO, like the subsection article for multiple clients said to use  Line 11 of your Form 1040, Schedule 3. But turbotax (and other software) won't auto-enter the schedule 3 calculation for excess social security withheld because of that since EIN.