In form 843, can I ask for a refund of medicare tax that also got factored into form 8959?

[joeman22]

I am a university student, and the university withheld social security and medicaid taxes by mistake in my W2 (as a student, I should have been exempt). I saw that TT does not handle form 843, so I will mail it after I file my return because the university is not able to give me a refund or correct the W2.

Since I file jointly with my wife, the medicaid wages on the W2 Box 5 get added to form 8959. So I have to pay additional medicare tax on these wages, even though I should have been exempt. When I submit form 843 to ask for a refund of the medicare tax shown on the W2 that was withheld in error, can I also ask for a refund of this additional medicare tax that got added into form 8959 (and would not have been factored in had the W2 withholding been done correctly)?

[JohnW222]

No.  Unfortunately, you can't use Form 843 -- you'll need to use Form 1040-X, Amended U.S. Individual Income Tax Return, to correct the amount computed on Form 8959. 

Please see Do not use Form 843 when you must use a different tax form in the Instructions for Form 843 for more information.

Please see the TurboTax Help article "How to amend (change or correct) a return you already filed" for instruction on how to amend your previously-filed tax return.

[joeman22]

Thank you for your help! I was wondering how to amend my return if the university said they cannot issue a corrected W2 and whether that would be a problem with amending the 8959? Due to an administrative issue, half of my W2 wages show up in Boxes 5-6 and were subjected to medicare tax. This was an error though and I should have been fully exempt, but the university said they cannot refund me that tax money and cannot issue a corrected W2. They did give me a letter of support that I could use. So to claim the 8959 adjustment by filing an amended 1040X, would I just explain what happened and say that had the W2 been done properly, there would not have been an amount that got factored into the 8959 and that is the amount I am seeking to amend, but that I cannot get an official corrected W2? Or how should I proceed?

[DMarkM1]

What you describe here will work. Complete 1040X that corrects the 8959 with an explanation of the changes and include the supporting documents from the employer.  

[joeman22]

Thank you! It turns out that we have not yet filed our federal return with TT. Is it better to file it with the "wrong W2" info as is, wait for it to be approved, and then mail an amended 1040X? Or since it has not been filed yet, should I try to fix it and just submit a "correct version" with an explanation of why the W2 I used on TT is different than the one I received from the employer? I want to make sure that using a different W2 than what the IRS has on record at the moment does not affect whether the return is accepted.

[JohnW222]

It probably sounds backwards, and it’s certainly effort on your part, but you should file using the Form W-2 with the information provided, even though the withholding should not have been made.

Entering a W-2 with information that’s inconsistent with what the IRS has received could lead to even more problems -- such as the IRS contacting you because they don’t know why you entered the W-2 as you did.

Then, yes, send in the amended 1040X. 

[joeman22]

Thanks for your help. I filed my federal return with TT and it has now been accepted. If I want to amend the return to ask for the change to form 8959, it seems that I need to change the amount in my W2 Box 5 as if there would have been no amount there (that way, there is no added medicare wage that gets added into form 8959). However, I did not receive an official corrected W2. Is that okay for me to do and change the W2 and just explain on the 1040X what I did? I can attach the support letter from the university, but unfortunately there is no corrected W2 I can use so I hope that will not be a problem? Or please let me know what is the best way for me to amend the 8959 if the IRS records W2 would be different.

[DMarkM1]

You will use a copy of the letter from the University to support your changes.