Two jobs via the same CPEO and excess social security

[mk1380]

Did your CPEO agree to "split" your W-2 by employer?

[rxs]

@mk1380  No, they didn't. After consulting with their counsel and some input from IRS, they came to the conclusion that it will be incorrect for them to split the W-2. They claim that IRS agrees that IRM guidance on the split W-2s for PEOs is incorrect as well.

They suggest I claim the refund on Schedule 3 as if I had two employers, since technically that was the case.

They also provided me with a letter explaining that the excess withholding was not an error but a requirement for a PEO in case of two employers.

Since TurboTax won't allow claiming the excess on Schedule 3 with a single W-2, my current plan is to prepare the return in TurboTax and then manually adjust 1040 and Schedule 3 and paper file.

[jcm21]

rxs, Have you been able to resolve the excess FICA issue and file via Turbo Tax?  I have same situation with multiple w-2s using one EIN due to the use of a single reporting agent by multiple employers within a corporate group.  I haven't yet been able to find a successful resolution through Turbo Tax and as a result may have to resort to manual filing my 1040 rather than e-filing. This can't be uncommon. Don't know why TT doesn't have functionality to handle it.

[rxs]

With multiple W-2s, TurboTax seems to allow the deduction if you omit the EIN when entering the second W-2. But I don't know if it makes any difference in the return file transmitted to IRS and if it will actually allow you to e-file it like that. I agree that TurboTax should handle your case - H&R Block does.

[WendyN2]

This is a situation not supported by the TurboTax Software, the suggestion is "The taxpayer should manually calculate the excess Social Security tax withheld. Add the amounts on the 'agent reporting' W-2s that appear in Box 4, Social Security tax withheld less the wage base. Enter the excess amount on Schedule 3, near line 10" This will need to be done manually and mailed in.

Please see this TurboTax FAQ, for more information, Are there any personal (individual) tax situations...

[taxformummys]

Hello, I am dealing with this exact same issue and wondering how did you finally end up resolving your situation. Did you e-file and submit form 843 seperately, did you file via paper or did you find another software to solve this problem? Any help will be much appreciated.

[rxs]

Hi @taxformummys ,

In the end my employer refused to issue two W-2s, so I had to paper file and claim the excess SS.

Another option I tried is to prepare the return in Turbotax, then use IRS Free File https://www.irs.gov/e-file-providers/free-file-fillable-forms

I had to manually reenter all the forms, so depending on the complexity of your return it could take a while, and you can't e-file state returns this way. But when I attempted to use it to e-file with my single W-2, IRS rejected my e-file with this error message:

'ExcessSocSecAndTier1RRTATaxAmt' has a non-zero value, then at least two Form W-2s with the same 'EmployeeSSN' must be present in the return.

This suggests that IRS should accept a return with two W-2s with excess SS.

[taxformummys]

Thank you so much for your help rxs. 

[noName16]

I am using the Turbotax 2021 and have the same problem, seriously thinking switching to HR Block now. Will Turbotax release any patch to support this use case in the near future. 

[junaideffendi]

Hey,

Have you ever tried HR Block, I stuck on same issue and was going over this thread, I tried HR Block and literally that option is useless, even after checking it complains for the same thing.

Did you even try it? @rxs 

[rxs]

I ended up paper filing last year. I manually entered in TT the excess value on line 10 of schedule 3 and attached a letter from the CPEO explaining their position.

I mailed the return in April 2021 and IRS accepted it and issued my refund including the excess SS in July 2021.

[junaideffendi]

Thanks for the reply.

So you did yourself?

You downloaded the pdf from Turbotax then added the excess amount?

What was written in the statement provided by CPEO?

[rxs]

You need to update the excess in TurboTax before printing the PDF. This way TurboTax will correctly recalculate all the totals.

I'm using Turbotax Desktop, so not sure if it's the same in the online version.

In the desktop version, switch to forms, go to "1040/1040SR Wks" and scroll down to Schedule 3 Line 11. Just above that line there is "Excess Social Security Smart Worksheet" where you can override the amount and it should flow to Schedule 3 Line 11. You should also see it reflected in Line 31 of Form 1040.

Once you do that, TurboTax will complain that this credit is incorrect, and won't let you e-file anymore, but now you can print and mail the form with the corrected amounts.

The statement said that I received payments from two customers of the same PEO. According to regulations, the PEO applied separate annual wage base to payments received from each. Then they issued a single W-2 since W-2 instructions do not provide that more than one W-2 should be issued in this case. Accordingly, there was no over-withholding or error, and I should be permitted to take credit on Schedule 3 just like any other employee that performs services for more than one employer during the same year.

[rxs]

You need to update the excess in TurboTax before printing the PDF. This way TurboTax will correctly recalculate all the totals.

I'm using Turbotax Desktop, so not sure if it's the same in the online version.

In the desktop version, switch to forms, go to "1040/1040SR Wks" and scroll down to Schedule 3 Line 11. Just above that line there is "Excess Social Security Smart Worksheet" where you can override the amount and it should flow to Schedule 3 Line 11. You should also see it reflected in Line 31 of Form 1040.

Once you do that, TurboTax will complain that this credit is incorrect, and won't let you e-file anymore, but now you can print and mail the form with the corrected amounts.

The statement said that I received payments from two customers of the same PEO. According to regulations, the PEO applied separate annual wage base to payments received from each. Then they issued a single W-2 since W-2 instructions do not provide that more than one W-2 should be issued in this case. Accordingly, there was no over-withholding or error, and I should be permitted to take credit on Schedule 3 just like any other employee that performs services for more than one employer during the same year.

[Gambit135]

@rxs RXS thank you for this thread and your detailed responses. Its now one year later, and I'm now in the same boat as you:

1) 2 Employers in 2022, but same CPEO, received 1 W-2

2) I have some Excess FICA to claim

3) Received a letter from CPEO explaining Credit as backup (due to your guidance)

Its now tax year 2022 and TURBO TAX STILL DOESNT SUPPORT EFILING W/EXCESS FICA W/H FROM A CPEO.