The system says I'm due a refund for my social security tax, but my employer says I'm not. please help.

[BMcCalpin · Accepted solution]

I can think of at least two reasons why this might happen.

(1) You have two or more W-2s, and the aggregate of the Social Security wages exceeds $132,900, then the sum of the Social Security withheld will be too high because the total that should be withheld should be the tax at $132,900. But because neither employer likely pays you more than $132,900, they don't know any better and are figuring the SS withholding correctly - it's not until you file your tax return that this all gets sorted out. And, yes, in this case, the excess is refunded to you on your tax return (line 11 on Schedule 3 (1040)). 

(2) You may be here working on a visa and are not eligible to participate in the Social Security system. In this case, the employer should not have withheld the taxes for SS, but this process is somewhat arcane and easy for employers to get confused on. Please see https://www.irs.gov/individuals/international-taxpayers/social-security-tax-medicare-tax-and-self-em... and see if this might apply to you.

If neither of these options makes sense to you, please come back and tell me the exact message from TurboTax and what page you got it on.

[Edited 4/2/2020 4:48 pm CDT - updated for 2019]

[angel56335]

Thank you.  Neither of those apply to me, so something must be incorrect.

[BMcCalpin]

Oh, I meant to give you a third option - which you have probably already considered - that either you entered the wrong Social Security wages number from the W-2, or the employer computed the wrong number when printing the W-2. I know it may seem silly, but could you check your W-2 and your entries in TurboTax for the W-2 and make sure that you entered the numbers into the correct entries? E.g., did you accidentally enter the Social Security wages into the entry line for Social Security tax withheld...

[VolvoGirl]

That is almost always user error.  There are 2 different situations when it will say Employer may have paid too much Social Security.  It's saying either 1 employer took out too much SS -OR- that you paid too much SS because you had more than 1 employer.  This should cover both.

If you had more than one employer and  the total of box 4 (only box 4 not box 6) on all your 2016 W2s  for Social Security is more than $7,347 you get the excess back on your tax return.  And it is for each spouse separately, not combined.  Check 1040 line 71 for it.  If only one employer took out more than $7,347 you have to get the difference back from that employer and get a corrected W2 form.  See IRS publication 17 page 252 http://www.irs.gov/pub/irs-pdf/p17.pdf 

So check boxes 3 & 4 on your W2. Box 4 should be 6.2% of box 3 up to a max of $7,347. 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.

[tas]

I will double check my entry but I'm sure I entered the numbers correctly yet Turbo Tax is saying that $2,091.31 should have been taken not $2,323,35.  The $2,323.35 = 6.2 percent. 

How can I resolve this in Turbo Tax if the entries are accurate.

[VolvoGirl]

@tas   This is on 1 W2?  What amounts are in boxes 3 & 4?  A sure way to fix this is to delete the W2 and re-enter it.  That may clear something out.