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?

[samchou]

@Kawh I am in a similar situation for my 2020 taxes. One CPEO, two different jobs, but I also got two different W-2s with same EIN. I too have an overpayment of social security tax. Even though I have two W-2s, Turbotax flags this overpayment, but still cannot resolve this issue within the software.

Could you kindly list the steps you took to get the refund? Based on this thread and a few others, I gather the following needs to be done:

1. Get a CD or a downloadable copy of TT 2020. I have Premier.

2. Adjust the social security tax withheld between the two W2 so that it is the max for this year (FY 2020). In my case, my first W2 has the max SS tax, so for my second W2, I will put a zero for this field. Not sure about this step since this was recommended while filing form 843.

3. Then take a printout of the state and federal forms.

4. Add the excess SS tax withheld to 1040 Schedule 3 Line 10 (2020 form) and calculate the rest of the form.

5. Adjust the form 1040 (line 31 2020 form) and below to calculate the refund / credit for tax.

Thank you in advance.

[SamS1]

Unless you want to input your entire return again, you need to download your TurboTax file from TurboTax Online then open it in TurboTax Desk to enter your changes in "Forms" Mode.  Forms mode is in the upper right hand corner of TurboTax desktop.   While in your return in TurboTax Online:

• In the left hand column select "Tax Tools"
• Select "Tools"
• Select "Save your 2020 return to your computer"
• Review for download location

Now in TurboTax Desktop select "Find a Tax File" and find the .tax2020 file you just downloaded.  You should be able to go and make the changes for your W-2s.

[Kawh]

@samchou, @SamS1 SamS1 has good advice.  As for your particular steps, they seem fine. However, I do not recall exactly what I had to do w/ my W-2s. The adjustments I had to make in general were the ones necessary to reflect reality (ie, override TurboTax's limitations). I will warn that I did this for FY 2019. Best of luck.

[arklemmer]

@Kawh did you end up finding a solution to this? I am struggling with this now with Justworks. Every CPA has told me my PEO will have to reimburse me, the PEO says I just need to file Schedule 3. But every filing system requires 2 W2s to file that exception. Do let me know if you found a solution!

[Kawh]

Hi @arklemmer. @BillM223 provided the solution. You need to download the software and override the forms. 

[Joopkins]

Just bumping this thread because I'm running into the exact same situation with Justworks. I have ultimately decided to go with an accountant. Has everyone had luck with 1040 schedule 3 approach rather than trying an 843? Seems wild that thousands of dollars can get held up like this. P criminal. 

[arathon]

I'm running into this same issue, with TriNet.

Their (unhelpful) response was the following:

" To comply with IRS guidance, TriNet must “reset” your Social Security wage base limit and “reset” your Social Security withholdings whenever your employment changes from one TriNet client to a separate TriNet client and no IRS exemption, which is rare, applies. This means that TriNet uses a separate annual wage limit, contribution base and withholding threshold for each TriNet client that employs you in a single calendar year. TriNet withheld these additional amounts due to the guidance of Treasury Regulations Section 31.3511-1(c)(2), which requires TriNet to “reset” Social Security withholdings for employees who work for multiple TriNet clients in a single tax year. You are entitled to an IRS tax credit or refund for all Social Security taxes that we were required to withhold from you in 2021 in excess of $8,853.60. See Box 4 of your 2021 W-2 for the total amount of your Social Security withholdings by TriNet in 2021.  Generally, you may recover your excess Social Security withholdings either by:     1. Filing an IRS Form 843 requesting a refund of the excess withholdings, or     2. Claiming a credit for the excess withholding amount in Line 72 of Schedule 5 of your income tax return on Form 1040.    If you file your income taxes using a different form, you will need to consult with your tax advisor for guidance on how to claim your Social Security tax credit.   We have seen valid Social Security credit claims and refund requests improperly rejected by the IRS as a result of their complex systems that may not be set up to recognize that you are a worksite employee of a PEO (Professional Employer Organization). If you receive such a letter from the IRS, we can provide you with an explanatory letter that you can use to support your IRS credit claim or refund request.  Please email a copy of the letter to [email address removed].  ​​​​"

All of which is to say, they know full well that the IRS is going to look askance at having Form 843 filed, but for whatever reason they're still not willing to do the obvious thing and correct it on their end. Weirdly, they're asking for me to go through the process of getting rejected by the IRS before they'll even provide support. 

[HubbaHubba]

@Kawh sorry for resurrecting this old thread, but could you clarify which one you did?

1. Manually change Schedule 3 Line 11 - added the excess social security amount and file via paper (NOT e-file)

... OR...

2. Change your W2 (I am not sure how and what you did here since W2 form cannot be changed),  manually change Schedule 3 Line 11 and then file via paper (NOT e-file)

[JohnB5677]

@HubbaHubba

Neither of those two ideas is very good.

If for whatever reason a single employer has over-withheld FICA tax, you can request that the employer applies for a refund, or if you want to request a refund, you will need to file Form 843, Claim for Refund and Request for Abatement, with the IRS.

Form 843  Instructions for Form 843

[Joopkins]

I was forced to file 843 by Justworks who cited some tax law to say that they correctly overwithheld because of the nuance of being a single PEO representing two employers. I think your options are paper file to bypass the software preventing you from doing a 1040 schedule 3 line 11, or just file as normal and submit an 843.

[HubbaHubba]

@Joopkins 

Just to confirm, are these the steps you did?

1. Paper file the tax with no changes:
   • No changes to the 1040 form or W2, as described by @SamS1 here
   • Ignore the warning from Turbotax about "penalties" for filing with excess social security
   • You need paper file because you need the address to send Form 843
2. Form 843
   • Send after you have filed the tax 
   • Line 2: enter the amount of excess social security.
     • amount =  total social security withheld - $8,853.60
   • Line 3: Employment
   • Line 5a and b: not required
   • Line 6: 1040
   • Line 7: the instruction said I must get a statement from the employer (the PEO), but they refused to do so. What did you provide then?

Per Form 843 instructions: "If you are claiming a refund of excess social security, Medicare, or RRTA tax withheld by one employer, you must, if possible, attach a statement from the employer."

BTW, did you get your 843 form approved by the IRS?

[HubbaHubba]

@JohnB5677 understood.

I was confused because from the past conversation, it sounds like @Kawh made manual changes to Schedule 3 and did not file Form 843.

If this is allowed, I can go this route because from my research, it seems that the IRS may deny Form 843 for whatever reason.

[Joopkins]

I had to hire an accountant because of this. So first off I'm sorry you're dealing with it, especially if you're someone with an otherwise simple tax filing situation.

My understanding is this:

My accountant manually fixed the incorrect amounts (lowered my social security income to the max, and my social security taxes withheld to the correct max) and submitted my taxes as such using his pro intuit software or whatever he uses.

Separately we are mailing in the 843 with a copy of my conversation with Justworks citing that they refuse to correct the excess and citing them utilizing IRC 3511 allowing them to over-withhold social security.

It's a mess and pretty messed up to put the onus on the tax filer to fix this. It seems like the tax law needs to be adjusted to either prevent PEOs from over-withholding, or simplify getting the excess withheld resolved by more normal means.

Overall it seems like both parties are pointing to different rules to create an unclear path forward to resolve. In my case I landed on the 843.

[HubbaHubba]

Thanks, @Joopkins 

"My accountant manually fixed the incorrect amounts (lowered my social security income to the max, and my social security taxes withheld to the correct max) and submitted my taxes as such using his pro intuit software or whatever he uses."

I don't see a section in my 1040 or any other form to do this manual fix. Could you tell me where do I change this?

[Joopkins]

This is just my guess at what my accountant did, based on my experience so don't want to lead you astray. I manually went in to my input values for social security income and social security tax withheld and lowered them to the correct maximums. 

When I uploaded my W-2 to HRBlock it did this automatically, where turbo tax flagged the amounts as incorrect/invalid (so thanks to turbo tax for recognizing the problem instead of just pretending like it didn't exist). And since I only had one employer turbo tax did not allow me to file to 1040 schedule 3.

Which led me into all this trouble we're in now. 

So I think you manually just have to change the amounts on your W-2 input to be the correct amounts. /shrug I'd certainly encourage you to get an accountant and not take the risk of interpreting my experience via the forums. Good luck 🙏