FICA taxes mistakenly not withheld by employer

[Anonymous]

I was a nonresident alien before 2022 but in 2022 I became a resident alien and am now responsible for FICA taxes. My employer however did not withhold the FICA tax from my paycheck. They have sent me a corrected W-2 that shows the correct values for the social security wages and Medicare wages and tips (Boxes 3 and 5) but the amount withheld for both is 0 (Boxes 4 and 6).

Will Turbox tax compute the amount I should pay for the not withheld FICA tax?

[MonikaK1 · Accepted solution]

No; since you were properly treated as an employee, the employer is responsible for collecting and paying over the FICA taxes. Your personal income taxes will be based on what you report from Form W-2. 

If an employer fails to withhold and pay over to the government an employee’s FICA taxes, in either a current or a subsequent year the employer can make an adjustment when the error is discovered to the quarter in which the underpayment occurred. 

If the employer discovers the error after the calendar year of the wage payment closes, the employer provides the employee and the Social Security Administration (SSA) a corrected Form W-2 (Form W-2c, Corrected Wage and Tax Statement) reflecting additional FICA earnings for the prior year and FICA tax withholding as if the employer had made it correctly (Regs. Secs. 31.6051-2(c)(a)–(c) and 31.6051-1(c)(1)).

This change to FICA wages and FICA tax withholding generally does not affect the employee’s prior year individual tax return. At this point, the employer has paid the employee’s taxes. The regulations provide a specific remedy to allow an employer to recover from the employee’s pay the FICA taxes that the employer paid on the employee’s behalf (Regs. Sec. 31.6205- 1(d)(1)). 

If the employer does not recover the amount from the employee, the payment of the employee's share of FICA tax by the employer is current wage compensation, subject to FICA and income tax withholding, and reflected on the employee’s year-end Form W-2.

See this IRS webpage for more information regarding the employer's options for correcting employment taxes.

Please see this TurboTax tips article regarding employees and FICA taxes.

[Anonymous4990]

Hello,

I am in a similar situation. FICA was not deducted as my residency status changed to resident alien last year. How should I proceed? Is there a way to pay IRS my portion of the taxes myself through DirectPay or through check (Or any IRS Form)? 

Or is the Employer route only way to fix this?

[ThomasM125]

There is not a way for you to pay the social security tax. However, you must keep in mind that your social security benefits will be calculated based on your wages, not the tax paid in on them. So as long as your social security wages, as reported in box 3 on your W-2 form, are correct you will not be penalized for having the wrong amount of social security tax paid in.

Also, when the IRS discovers that the wrong amount of social security tax was withheld, they will likely inquire about that with the employer and demand a corrected form be submitted along with a payment of the taxes due.

@Umerkk96

[Anonymous4990]

Alright. In that case I dont do anything now and just file my federal and state taxes based on the W2 I have. Put in the amount that was withheld for FICA, and wait to hear from IRS when they discover this, correct?

My concern is I do not want to wait until IRS discovers it. I am able to pay it right now and I have discovered this so I wanted to proactively pay this off from my part. Is there a way I can park around $2500 - $3000 to IRS and when they discover this they could just deduct this from there? 

[DaveF1006]

Yes, the best way to include this in your wages is to follow these instructions:

1. Go to Federal
2. Wages and Income
3. Other income 
4. Less Common income
5. Miscellaneous income
6. income not reported on a W2.....  When you report the employer information, use the same employer that issue the W2.  When a drop down appears asking you the reason why you are reporting this, select reason Code H.

Now back out of this income so that you won't be reporting the same taxable income twice. The 8919 will still remain in your return collecting the unreported FICA taxes.

1. Log into your account
2. Select Wages and income
3. Less Common income
4. Miscellaneous Income, 1099-A, 1099>start
5. Scroll to the bottom of the page to Other Reportable Income
6. Other taxable income, answer yes
7. Then give a brief description of the income and the amount listed..
8. Once this appears in a summary screen, click on the Add Miscellaneous Income Item  
9. Describe this as taxable income already reported and then report the wage amount with a minus sign in front of the amount.
10. This will then appear as a adjustment in Schedule 1 reducing your taxable income by the amount reported.

[Edited 02/21/25|9:15 am PST]

@Anonymous4990 

[Anonymous4990]

I tried this. It still doesn’t show Social security taxes as payable in the total tax bill. 

[DaveF1006]

It depends on where you are looking. Look in your list of forms and see if form 8919 is listed. This is where it is listed.  To verify if 8919 is present, go to:

• Tax tools
• tools
• delete a form
• Look for form 8919
• Don't delete though.  You are just verifying the form is there.

If you are using the desktop version, go to the forms mode to see if you have form 8919. If you don't see form 8919, go through the steps again and see if you missed anything.

@Anonymous4990 

[vishalkam]

Hey Dave,
This method is unclear to me.

For this step " income not reported on a W2.....  When you report the employer information, use the same employer that issue the W2.  When a drop down appears asking you the reason why you are reporting this, select reason Code H."

Should I enter the amount here? As well. How do I know how much to enter if I did not receive that info from my employer?

[DaveF1006]

It depends. If you kept your pay stubs from the employer, you can enter that in as income or you might contact your employer to find out how much income you earned from them 

[vishalkam]

Hey Dave, 

For full context, I followed your steps.

I was on an F1 student visa last year.

I entered the US in 2019,and have essentially been here since, which means that I am considered a resident alien for tax purposes ( I pass the substantial presence test) .

I didn't owe FICA taxes until I transitioned to a resident alien from being a non-resident alien. I wrongly assumed that this transition happens 5 years from the date that I entered the US(which would have been Sep 2024) instead of the 5 calendar years that I was here (which was Jan 2024).

My W2 shows no SS or medicare wages. (boxes 3 and 5 are empty)

I asked my employer for a W2-c to see if that would help but I'm still pretty uncertain.

The form 8919-T calculates an amount that is far above what I actually for FICA taxes (should be 6.2% for SSTaxes and 1.45% for medicare taxes). Instead it shows me an amount that is roughly 5 times that amount in returns. Can you please confirm that the form is not broken? Should I not fill out an amount in "Total Wages Received" when following your steps?

 

[DaveF1006]

If your employer did not withhold FICA taxes for the year, the FICA taxes are calculated at 15.3% rather than 7.65%. What is the amount that is calculating for you?  

[vishalkam]

My taxes increased by nearly 37% when I entered my wages in that form. Also, why would the form tax me at 15.3% instead of 7.65%, if my employer did not withhold my taxes? Would my employer not be liable for the other 7.65%?

[DaveF1006]

Yes, you are correct.  The 8919 form would only show 7.65%. Now my question is, were federal income taxes withheld from the $100,000 in 2022? I ask this because the 37% increase sounds like a combination of federal income tax and 7.65% FICA taxes.

Check your initial entries and see if you reported federal income taxes withheld in Box 2 of the W2.  Check both the hard copy of the W2 as well as the entry you made.

[vishalkam]

Federal taxes were withheld( Box2 has an amount in it) - I checked on both Turbotax and my copies. In fact, until 8919-T was added, I was actually getting a net return.