Mulitple W2s caused excess social security tax withheld

[Barb777]

I have W2s from two different employers in 2021.  Turbo Tax is telling me to get a corrected W2 from my current employer which is not correct since they need to withhold the amount that the company calculates - they do now take into account whatever the old/other company withheld.  How am I am able to claim this excess as credit on my 1040?  I do not see a way to get Turbo tax to adjust this.

[AamilD]

It depends. You will have excess Social Security withholdings if the sum of multiple employer's withholding exceeds $8,853.60

If multiple employers in combination withhold excess Social Security, then you don't need to do anything since TurboTax will automatically add the excess to your refund amount which you will be able to see on Line 11 of your Form 1040, Schedule 3.

However, lets look at a different scenario. The amount liable to Social Security tax is capped at earnings of $142,800 in 2021. So while for example if you earn $100,000 from your first employer and $50,000 from your second employer, this is above the $142,800 and in that case TurboTax will add the excess to your refund which you can see on Line 11 of your Form 1040, Schedule 3.

However, if you for example earned $150,000 from your first employer and $50,000 from your second employer, this case is different. Even though you have multiple employers, since 1 of them individually exceeds the limit and did extra withholding, in this case TurboTax will not add the amount to the refund and you will have to contact your employer to provide you with a corrected W-2. Additionally, your employer will have to provide a refund for the excess amount.

Do not file with excess withholdings on your return, as you may be subjected to penalties and interest.

Please visit Can I get a refund for excess Social Security tax withheld? for more information.

Additionally, You can view your return or just your 1040 form before you e-file to make sure the numbers which are being used for calculation seem reasonable.

Please follow the steps below:

1. Open or continue your return.
2. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
3. With the Tax Tools menu open, you can then:
   • Preview your entire return: Select Print Center and then Print, Save, or Preview This Year's Return (you may be asked to register or pay first).
   • View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu. This option is free and you can Preview your return before you file.

Additionally, please visit Preview Tax Return before E-Filing , for more information

[Barb777]

My first employer wages were only $7,955 and the second was over $142,800.  I entered the information into Turbo Tax and the software is not applying the excess to Line 11 of Form 1040, Schedule 3.  Turbo Tax is saying that I need a corrected W2 which my employer is rightfully saying they will not do.  How do I correct this in the software to give me a tax credit?

[DoninGA]

@Barb777 Is the Employer EIN the same on both W-2's?

[Barb777]

No.

[DoninGA]

On the W-2 from the employer who has $142,800 for SS wages in box 3, is the amount of SS taxes withheld in box 4 exactly $8,853.60?

On the W-2 from the employer who has $7,955 for SS wages in box 3, is the amount of SS withheld in box 4 exactly $493.21?

If any of the these amounts are off by even a $0.01 to much this will cause the problem.

If these are both correct then there is no reason that the program would not be entering the excess SS taxes withheld on Schedule 3 Line 11.

I would suggest that you delete the W-2's and re-enter each manually.  Then see if the program correctly takes care of the excess SS taxes withheld.

[Barb777]

Thank you for your suggestions however it did not work.  The two companies have a parent / subsidiary relationship however they have 2 separate EINs and use 2 different payroll processing platforms.  Not sure why they would connect the 2 together.  May have to switch to another tax software company that will allow me to do this properly.

[Barb777]

I do not understand your answer.  My first employer wages were only around $8,000 and they withheld the 6.2% FICA tax appropriately.  My second employer wages exceeded $142,800 and they appropriately withheld $8,853.60 based on the FICA wages only, not knowing what the first employer withheld.  Both employers calculated the withholding correctly.  These two employers are not going to talk to one another to resolve this.  Why cannot I not get the credit back on my 1040?   That is the most logical and expedient way to handle this.

I requested a corrected W2 from my second employer (as Turbo Tax suggested) and this second employee said their tax department handled the situation correctly and included a very long letter with their reason.  They said that this was a Turbo Tax issue and that I should use another tax software program.  I really do not want to do this however if I cannot get it resolved, I will have to so in order to file my taxes. 

This seems like a really big hassle for $493.  Please help.

[ThomasM125 · Accepted solution]

If you enter W-2's from different employers and they withheld too much social security tax, you should get a refund of the excess on your tax return. It is possible that the IRS considers your employer to be one since they appear to have common ownership and that could be the issue. 

You could try entering one of the W2's without the ID number and see if that resolves the issue. If so, you could file the return manually without issue.

You could also try deleting the two W-2's and reentering them. 

[Barb777]

I deleted the EIN from one of the W2s and that worked.  I guess they see the two companies as linked somehow even with different EINs and payroll service providers.  Thanks!

[MeiMei1]

Hi, everyone! 

Is this issue resolved? It seems that I am still facing the same issue recently (I have multiple W2s coming from the same employer. But TurboTax incorrectly adds up the social security tax and shows an error stating that I need to get a W-2c for excess social security tax withheld (which my employer confirms there's nothing wrong with my W-2s). 

Any suggestions? 

Thanks! 

[DawnC]

If the W-2s are from the same employer, TurboTax will not issue the credit on your tax return.    You will need to submit Form 843 to get your excess SS contributions returned to you.   @MeiMei1 

How to get a refund for excess SS - Please see the instructions in the link.   Please see the note at the bottom - before giving the Form 843 instructions.    Do not file with excess withholdings on your return, as you may be subjected to penalties and interest.   

What if my employer can't—or won't—cooperate?

You can correct the Box 4 amount yourself before filing.   Simply multiply the amount in Box 3 by a factor of 0.062 and enter that amount or 9,114.00 (whichever is less) in Box 4.

To get a refund for the excess withholding, fill out IRS Form 843: Claim for Refund and Request for Abatement according to the Form 843 Instructions and mail it in separately.   Make a copy to keep with your tax return paperwork.

[MeiMei1]

Hi @DawnC 

Thanks for your reply! 

For the past couple years, I have always had multiple W-2s from the same employer and it has never caused any issues for my previous tax returns (This similar multiple W-2 structure actually applies to other employees at my companies as well) 

I had tried the suggestion posted on this forum previously - to change one of the Employer (EIN) number. And once I did that the error never showed up again. So that means the numberings/calculations of the tax holdings are correct from my employer, but TurboTax just can't recognize the multiple W-2 structure and reports incorrect error. 

So this seems like a software bug issue - would you be able to help fix this problem? 

Thanks! 

[ThomasM125]

Entering a false employer ID number on a W-2 entry will void your TurboTax accuracy guarantee, so if the IRS takes exception to the entries on your tax return you will have to address the matter with them without any support from TurboTax. It is debatable as to whether you should recieve your excess social security tax refund by entries on your tax return or by a refund from your employer. Appearantly TurboTax has decided that the refund from your employer or filing form 843, as proposed by @DawnC , is the correct course of action. @MeiMei1 

[Anonymous]

I have a similar issue to the one reported by @MeiMei1 on this discussion.

I have 2 W-2's issued by a single Common Pay Agent using the same EIN with a combined total over-withholding of social security.  Turbotax is not allowing for the form 1040 deduction and instead presents the W-2c message.

I work for a large corporation that uses a common pay agent with same EIN but different Line 2 box C names.  The tax department of the company included a letter with my W-2's explaining the following:

"As instructed by the IRS: a Common Pay Agent provides the following information in box C of form W-2:

Line 1: (Name of Agent)

Line 2: Agent for: (name of each employer)

Line 3: Address of Employer

As required each form W-2 reflects the EIN of the agent in box B.

Both W-2's reflect the Common Pay Agent EIN of XXXXXX for (Name of Agent).

As an acting common pay agent it is generally not the responsibility of the agent for refunding excess social security tax on employees.  If an employee worked for more than one employer during 2022 (as identified on Line 2 of box c) and had more than $9,114.00 in social security tax withheld, he or she should claim the excess on the appropriate line of Form 1040 or 1040A."

Can this issue be raised as a blocker for users in this situation?