Social Security tax overpayment with employer failing to provide a W-2c

[GC17]

I had 2 employers last year.

Employer 1 issued a W-2 with the limit of $8,537 in ss tax withheld;

Employer 2 issued a W-2 with the limit of $8,537 in ss tax withheld;

Then, in December, after an RSU was triggered though Employer 1,

Employer 1 issued a second W-2 with $3,268 in ss tax withheld.

Turbo tax tells me that I am getting a tax credit of $8,537 for the ss tax Employer 2 collected, but that for the $3,268 overpayment I must ask Employer 1 for a refund and a corrected W-2. Employer 1 is refusing to do this. Turbo Tax says that in that case, I should correct the W-2 myself and, after filing my taxes, mail in Form 843. It says that if I file my return with the extra ss tax withholdings, I may be subject to penalties and interest! But is it really okay to correct the W-2 myself when Employer 1 is providing it to the IRS uncorrected? Wouldn't that make me subject to penalties and/or trigger an audit?

Thanks!

[DianeW777 · Accepted solution]

Yes, if you employer will not do what is required of them.  The Form 843, along with your copy of the W-2 and the document showing the RSU (if necessary) from Employer 1 showing the excess withholding of social security tax.

The IRS will go after Employer 1 for the tax. 

Note: When one employer withholds an excess, it's impossible for them to pay that excess amount to the IRS based on the way the employer form for withholding is completed (Form 941).  The form uses a formula and not the exact amount of withholding actually taken from the employee.  

[GC17]

Turbo Tax says that if I file my return with the W-2s as they are (with extra ss tax withholdings), I may be subject to penalties and interest, so I should correct Box 4 myself. But is it really okay to correct the W-2 myself when Employer 1 is providing it to the IRS uncorrected? Wouldn't that make me subject to penalties or an audit?

Thanks!

[ReneeM7122]

No, you should not correct W-2 boxes yourself.  They should be entered exactly as they appear, because the IRS will compare your tax return to the information that was reported to them.  Yes, it could subject you to an audit.