This has happened to me in 2018, and I am still trying to get my overpaid Social Security tax back. I am very curious if any of the people on this thread succeeded in getting their money back and how.
I contacted the PEO who responded with an email:
"The reporting requirements of Section 3511 states that a CPEO will be treated as the employer of any work site employee of the client/customer as reported by the client/customer but only with respect to remuneration remitted. The contract between Domino Data and Sequoia One PEO, LLC allows for the successor and predecessor employer status between the two parties during the term of the service contract. With this designation, the liability of taxes must be handled in the following manner:
- The CPEO will be treated as the employer of any individual/worksite employee as reported by Domino Data
- Taxes withheld from the worksite applies to the client not the CPEO
- The client, not the CPEO shall take into account wages and employment taxes
- The CPEO receives payment by the client to remit on their behalf to the appropriate taxing agency
Due to this reporting requirement Sequoia One PEO, LLC is listed as the employer and our Federal Employer Identification Number is listed on the W-2, we are required to report taxes on a client by client potentially causing employees to be over withheld for Social Security or under withheld for Medicare. Sequoia One PEO, LLC is unable to report taxes in a manner which does not follow the prescribed requirement under IRS Code 3511, resulting in employees in these situations to obtain the credit directly from the IRS or remit payment to the IRS. Let us know if you have questions."
I filed form 843, attaching the email as supporting documentation.
6 months later (August 2019) I received a rejection from the IRS.
"We are unabled to process your claim for the exempt social security and Medicare withholding tax because you did not submit all of the necessary documentation. You should obtain a refund of the exempt withholding tax from your employer. If you are unable to obtain a refund from your employer you must submit a complete claim." (This is followed by a list of examples of "necessary documentation" that clearly do not apply to my case, like "a copy of the form 8316".
After 3 hours on the phone with the IRS they suggested I file ...
form 843. Again.
I followed their advice to the letter. I did not retain a copy of my first filing of 843 but I am sure the 2nd one was very similar, again accompanied by a - this time, more detailed - email from the PEO.
12 months later, I am receiving another rejection with very similar formulas, making me suspect whoever reviewed my case did not have a clue.
This is fun.
