Why no Medicare tax form 8959

Forum|Forum|2 years ago
April 13, 2024
2 replies
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Employer withheld the 0.9% Additional Medicare Tax, but wages do NOT exceed the threshold for our filing status. I believe Turbotax detected the excess tax because it asked me to verify the Medicare wage and tax figures, so why didn't it generate a form 8959?

Best answer by Vanessa A

You can give the phone people a call to see if they can give you some help with finding a workaround to correct the problem. You can do this at 800-4INTUIT.

I was able to reproduce your issue and what is happening is that the form is being populated in the background and using the desktop program, the form can be searched for in forms mode and viewed. The numbers on form 8595 are accurate but the form is not linking to the form 1040. We have sent this to be investigated further, but there would not be any fix that is released for this filing season.

SamhomeAuthor

Level 2

I am pretty confident this is a software bug. Tested with imported W2s, and got no prompt to verify info and no 8959. Tested manually entered W2s, and got prompted to verify medicare figures, but got no 8959. Interestingly, went back and added $500 to the medicare tax withheld and got no prompt to verify, and still no 8959. Tested with both sets of W2 figures combined on one fake manually entered W2, and the 8959 generated successfully, but that would not stand up to an IRS electronic audit. Humph. Now I can't get Turbo to generate a 1040X for me to get back the extra funds because none of my figures have actually changed! Double humph.

Vanessa AAnswer

Level 15

You can give the phone people a call to see if they can give you some help with finding a workaround to correct the problem. You can do this at 800-4INTUIT.

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SamhomeAuthor

Level 2

Thanks for your reply. Given your comment about "in the background" I went looking harder in Turbo. I had been in forms mode many times, but I never expected the "open form" button would have any forms that contained my information unless they were included in the list of forms pertinent to my return. I wish I had seen that populated copy of 8959 in the back before I spent many hours researching the topic because I thought I must be making a mistake or missing something. At least now I feel validated, but I still have to generate and file a 1040X, and probably wait 6 or 9 months for the refund. I appreciate your explanation.

DianeW777

Level 15

It seems like there may be a misconception about this form. Form 8959 is not used to refund any medicare tax that was withheld in excess by your employer. The employer is not paying the IRS excess medicare tax which means you may have to go back to the employer for reimbursement. Based on the employer tax reporting form (form 941) it's not possible to over pay.

Who should file Form 8959?

Beginning with the 2013 tax year, you have to file Form 8959 if the Medicare wages or RRTA reported exceed $200,000 for single filers or $250,000 for joint filers
If you have self-employment income, you file form 8959 if the sum of your self-employment earnings and wages or the RRTA compensation you receive is more than the threshold amount for your filing status.
- What is Form 8959: Additional Medicare Tax

If by chance you are referring to an excess of social security tax withheld and if you had two or more employers, then you are entitled to a credit. No form is used, it simply goes on your 1040, line 31, from Schedule 3, Part II, line 11.

@MB000

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SamhomeAuthor

Level 2

DianeW777, your advice appears to differ from the IRS instructions for form 8959. The "Who Must File" paragraph begins: You must file Form 8959 if one or more of the following applies to you. •Your Medicare wages and tips on any single Form W-2 (box 5) are greater than $200,000 (followed by more reasons not of interest to me.)

I questioned my employer for withholding beginning at $200K when the threshold for owing the tax is $250K for MFJ, and they explained they are required to begin withholding at $200K for everyone because they cannot be certain you will still be married on 12/31 and file MFJ. Therefore, form 8959 is necessary to get credit for the excess Medicare tax withheld.

SamhomeAuthor

Level 2

RobertB4444, that is correct. Neither my 2023 return nor my 2024 return generated a figure on Sched 3 Part II line 11. My 2024 return generated a form 8959, attached it to my return, and carried the result through to 1040 line 25c. Only one employer both years, but in 2023 they changed payroll systems mid-year causing the two W-2s that I was working with in my original post. I figured that must have been what tripped up the Turbo SW in 2023 since 2024 worked in a way that generated my appropriate credit. There are, however, several complexities yet to investigate in how Turbo handles "Excess Medicare", as pointed out by MB000. Thanks for your interest.

RobertB4444: PS - I looked back to the year my husband changed employers, and Turbo did use Schedule 3 Part II line 11 that year with no form 8959! Very suspiciously, that year caused a 22-month battle with the IRS when they reduced my refund stating: "We changed the amount claimed as excess social security tax withheld or tier 1 RRTA withheld on your tax return because you incorrectly calculated the excess amount. (294D)" This despite resubmitting copies of W-2s from 2 different employers clearly showing far too much total SS tax withheld. This was straight employer overlap withholding since neither employer paid even close to the $200K threshold for withholding "excess". I hope this information proves helpful!