What is excess social security and tier 1 RRTA tax withheld

[JohnW152]

You don’t need to do anything else – no additional paperwork is required of you.

If you have a refund coming on your return, it’ll be included in your refund amount.  If you have a balance due, it's included in the computation for that, as well.

The IRS doesn’t notify Social Security; it merely verifies that the excess amount you reported is correct.

@Webby638

[Webby638]

Thank you, John.  I see that it was credited towards tax owed.   I had to look closer to see it. Thank you.  

[ellenjshaw2018]

We got a letter from the IRS stating:

"The formd W-2, submitted with your tax return, are insufficient to support the amount you claimed for excess social security and tier 1 RRTA tax withheld on your Form 1040. Send us all the Forms W-2 used to support your claim for excess SST/RRTA."

Does this refer to what you are explaining? My husband switched jobs in mid-2021 so just trying to piece the puzzle together as to what the IRS is claiming/wanting.

[JohnW152]

It’s difficult to tell who’s post you’re referring to, but here’s the long and short of it.

For tax year 2021, no taxpayer should have more than $8,853.60 in Social Security withholdings.  That’s the maximum allowed by law.

If any one taxpayer has more than that withheld, they’re entitled to a refund of the excess.

If one employer withheld too much, you’ll have to contact the employer about getting the excess amount back.

But if an excess has been withheld, in combination, by more than one employer, you claim the excess on your tax return.

The IRS is indicating that you claimed an excess amount on your return, but it doesn’t have documentation to substantiate it.  That’s why they want to see your Forms W-2.

For a more in-depth explanation, please see the TurboTax Help article Can I get a refund for excess Social Security tax withheld?. 

@ellenjshaw2018

[josephwb333]

I filed my taxes with the W2s I received from my employer, but I separately completed and sent Form 843 (https://www.irs.gov/instructions/i843) with proof of my overpayment, and a letter from my employer saying that I overpaid. I owe on my federal taxes this year, but I have not paid yet, as I am waiting for the IRS to confirm the amount that I owe (e.g., subtracting my overpayment on social security).

[ellenjshaw2018]

Thank you so much! That was very helpful! Currently on the phone with the IRS and they are looking in to it but I will submit my W-2s just for them to verify

[Filing564]

"If you had more than 1 employer and paid more than the max SS in box 4 you get it back. And it is for each spouse separately, not combined."

Does Max social security of $8854 is calculated separately for each spouse. On my W2 , my employer has deducted Max social security of 8854

But my spouse has multiple employers and they have deducted a total of $2528 of social security on those W2s. Does that mean we can get a social security credit of excess social security deducted as combined both of us exceeds $8854 , but separately neither of us, but or coming status is, "married filing jointly"

Please let me know.

Thanks in advance

[VolvoGirl]

No.  It's only for 1 person.  Not combined.  Only if 1 spouse had several jobs and they went over the max.  Each person is separate.  The max is per person.  So your max is 8854 and her max is 8854.  Hope that clears it up.  

That's why it's very important to enter each W2 under the right name.  So you don't claim any excess on your return.  That messes people up.  

[mmyeehaw99]

Deductions for work or other adjustments is $1,032.00

[mmyeehaw99]

Deductions for work or other adjustments $1,032.00

[VolvoGirl]

@mmyeehaw99   What is your question?  Is this on you W2?  Job expenses are no longer deductible.  

[Rajl9]

Hi

For line 11 of schedule 3, should we enter the total withheld minus the maximum (or) should we enter the total amount that was withheld.

Kindly advise.

Thanks

[LoganathanB]

TurboTax will calculate any excess social security tax withheld and populate it in Line 11 of Schedule 3.

I will be the total withheld minus for the maximum allowed for social security $142800 for 2021. Tax $8854

[VolvoGirl]

@Rajl9   You do not enter the excess Social Security.   You only enter your W2s and Turbo Tax will automatically figure out if you have an excess.  Isn't it doing it?

Are you married?  Make sure each W2 is assigned to the right spouse if you are married.

For 2021 the max for Social Security is $8,853.60 on $142,800 of wages (142,800 x 6.2%).

You only get excess SS back if one person had more than 1 employer and those employers took out more than the max of  $8,853.60 (for 2021).  If one employer took out more than the max you have to get it back from the employer.

Check 1040 Schedule 3 line 11 which goes to 1040 line 31.

[jmjmcgriff]

Using this formula (box 3 x .062), we did not overpay.  Yet TurboTax says we did and now the IRS is making us pay it back.  One of us received unemployment benefits in 2021; could this have caused the discrepancy?  Bottom line: we (obviously) do NOT want to pay the IRS any additional money if we don't owe.