Turbo Tax says my wife's employer withheld too much Social Security tax but the amount they withheld was exactly 6.2% of her wages. Turbo Tax calculated 0.062%. Bug??

[Opus 17]

What are the numbers in box 3 and 4 of her W-2?

[SweetieJean]

Did you type her income incorrectly?

[CarolynM]

The tax is capped at $7,960.80, not necessarily 6.2%.

6.2% is .062

[Opus 17]

6.2% is 0.062, not 0.062%.  And Turbotax will flag the W-2 any time box 4 is more than 6.2% of box 3.  The most common reason I have seen this year is rounding errors.

[VolvoGirl]

Check boxes 3 & 4 on your W2. Box 4 should be 6.2% of box 3 up to a max of $7,960.80.  So take the amount in box 3 and multiply it by .062. If box 4 is more than that you need to get a corrected W2 from your employer.  But also go back and double check your W2 entries, you may have entered box 3 & 4 wrong.  A lot of people who have asked this found they did enter an amount wrong.

A sure way to fix this is to delete the W2 and re-enter it.  That may clear something out.

[Opus 17]

Another customer found that the dollar figure (ending in 51 cents) was rounded up to the next whole dollar, triggering an error.  By dropping the number in the program by 2 cents, the error went away.

Since the employer has to either round the SS tax up or down to the nearest penny on each paycheck, it's possible that the total amount of SS tax collected from 52 or 26 paychecks will be a few pennies more or less than exactly 6.2% of the year end gross taxable amount.  This is not something the employer can or should correct.  But apparently Turbotax is very sensitive.  If the exact tax at the end of the year ends in (lets say 45 cents), but the employer collected 51 cents due to rounding issues, and turbotax then rounds it up to the next whole dollar, it suddenly becomes a red flag.  Turbotax is wrong in that case (too sensitive), not the employer.

[twentysixpoint2]

Thanks. For whatever reason when the W2 imported, Box 3 was a hundred times less than Box 1 and Box 5.