Turbo tax is saying that my employer withheld too much Railroad Retirement Tier 1 and that they owe me a refund. That is wrong and its messing up the rest of my taxes

[mdibenedetto]

they're telling me to contact my employer for a refund. the software is wrong and i've paid the correct amount into RRRT1.

[SamS1]

Enter your Railroad Retirement Tier 1 amounts in box 14 of the W-2. Do not enter it box 4 for Social Security withholdings. In box 14, enter the description, amount, and select the category drop down then scroll to Railroad Retirement Tier 1. Additionally, you will need to enter in box 14 the Railroad Retirement compensation amount from box 1 of the W2 so the overpayment is not reported. Select "Railroad Retirement Compensation" from the box 14 category.

Click here for more information on entering Railroad Retirement information in TurboTax

Your Tier 1 taxes should 7.65% of your compensation, The maximum wages Social Security tax portion (6.2%) is 137,700. There is no maximum on the Medicare portion (1.45%). The Tier II tax is 4.9% with maximum wage amount of 102,300. You might be able to back into the amount of your taxable compensation by using the Tier I percentages. From there you can look at reported wages on your W-2 and box 12 and box 14 come to a total that will equal the calculated amount. The only variable would be if your compensation is over 137,700. Otherwise you can divide your Tier I taxes by 7.65% to get to your taxable compensation amount then go from there.

[mdibenedetto]

yeah the turbo tax software is wrong this year, i had no issues last year but this year its saying they withheld too much which is wrong. which is holding me up from filing 

[awb811]

Correct i Have rail road taken out from railroad carrier and Union which i work for It is an overpayment on my part due back to me Like guy said Turbo tax always refunded this to me from railroad retirement. Need an update.!!!!

[Port53]

TurboTax is still incorrectly reporting "Your employer withheld too much Railroad Retirement Tier 1 tax from you wages 2023

This came up after entering my W-2 and the railroad retirement tax was entered in box 14.

When are you going to fix this bug that has been around for at least three years.

[DaveF1006]

You received the error message because the amount on Line 14 is greater than allowed, but entering the information below will allow your railroad income to be properly reported.

TurboTax recognizes the codes Tier 1 and Tier 2 in box 14 of your W-2, so you only need to choose these codes from the drop-down menu in Box 14.  They are near the bottom of the list.  Look for ''Railroad Retirement Tier 1 Tax'' and below that is ''Railroad Retirement Tier 2 tax''.  TurboTax will properly report and apply these amounts on your tax return. 

ADD another line 14 entry with the same amount as in Box 1 Wages. Select code - "Railroad Retirement Compensation." Code RR.

@Port53 

[Port53]

David Here is a screen shot of what I entered.   For MED i selected Category "Railroad Retirement Medicare"

TEIR2 category is "Railroad Retirement Tier 2 Tax" and TEIR1 category is "Railroad Retirement Tier 1 Tax"

I click continue and it asks to check local taxes, I live in WA state so no local taxes.  I then hit Continue and the screen comes up "It looks like you're due a refund from your employer....."

Are you saying to add another line that does not exist on my W-2 form?  How would someone know to do this if the line does not exist on the W-2?

I followed what you said to add "Railroad Retirement Compensation." Code RR and I get the same "It looks like you're due....." screen

Below is what is on my W-2, what am I entering incorrectly?

[DianeW777]

Yes.  As indicated by DavidF1006, you must add a line to Box 14 to show the compensation.  When added to the W-2, then it flows properly in a test return.

This allows TurboTax to review the appropriate calculations for the Tier I and II withholding.

• Tier II is limited to $118,800 in wages ($118,800 x .049 = $5821.20)
• Tier I  is not limited and full wages are taxed at .0765, which again is almost exactly matching your withholding.

The amount shown as 'MED' is not the 'additional Medicare tax' since you have not gone over the wage threshold of $200,000 in 2023.  If you would like to update and provide information about that specific entry we are here to assist.

@Port53 

[Port53]

I did not add MED line as'additional Medicare tax'  it is added as "Railroad Retirement Medicare"

How would someone know to add the additional entry since the line does not exist on the W-2?

Look like a defect in TurboTax. W-2 does not have the line TurboTax wants entered and there are no instructions to enter the additional line.

Please open defect and give me tracking information.

[Busa87]

Don't worry I have been filing my Railroad taxes for 10 years with Turbo Tax. It ALWAYS says you overpaid or that there was some issue with your Tier 1 or Tier 2 taxes. Just ignore it. It won't stop you from filing.

[Port53]

@Busa87 you are willing to use defective software that can't handle simple task of entering a W-2 correctly?

What else is it doing incorrectly?

[Busa87]

Yes, because the problem isn't TurboTax. It is because the Railroad has changed the name of the taxes several times over the last few years. Last year the railroad made a mistake and took out around $6 in Medicare one week. This also caused an issue on the W2s. The year before that a payroll company change also changed the name of one of the tax boxes. This year Massachusetts taxes need to be filed a little later because of some Tax law changes. This is all very routine. 99% of the country pays completely different taxes than people who work for the railroad and they are dealing with different tax laws for all 50 states. 

[bdDiane]

I'm running into the same problem. In previous years, adding an additional line in box 14 has worked, this time it is not. I tried using the amounts in box 1 and 12 and just in box 1. Both ways tells me I'm due a refund.  Any other tips? 

[DaveF1006]

If you reported everything correctly, you may be due a refund. According to the IRS, you may receive a refund under these conditions and that Turbo Tax handled this correctly.

• If you had more than one employer and too much Social Security tax or Tier 1 RRTA tax withheld, you may be able to claim the excess as a credit against your income tax on your income tax return. Refer to “Excess Social Security and Tier 1 RRTA Tax Withheld” in the Instructions for Form 1040 (and Form 1040-SR) for more information.
• You may be entitled to a refund if you paid excess Tier 1 RRTA tax over the Tier 1 RRTA compensation base or if you paid excess Social Security tax over the Social Security wage base.
• You may be entitled to a refund if you paid both Tier 1 RRTA tax and Social Security tax which, combined, exceed the Social Security wage base.
• If you had more than one employer and too much Tier 2 RRTA tax withheld, you may request a refund of the excess Tier 2 RRTA tax using Form 843PDF. Attach copies of your Forms W-2 for the year to Form 843.

Excess Social Security and RRTA tax withheld

@bdDiane 

[LAC1999]

The number they took out does not equal 7.65% of my wages, it is lower. I tried several remedies suggested in this forum and I'm still getting the error. I've deleted the entire W-2 form and re-entered according to the way you wanted me too, and still getting the error. When I called my employer, they said TurboTax has a glitch in their system and unless they fix it, I have to use something else. I worked for Union Pacific Railroad for 26 years and never ever had this issue now I work for a new company railroad and that's the first error I getis there a way TurboTax can fix this or am I gonna be forced to go to another program?