Receiving "You may be due a refund from your employer" message

[jtaylordfw]

I changed jobs in the middle of 2021, and the sum of my Social Security withholdings across both employers exceeds the maximum, so I should be due a credit on the overpayment.

When this has happened in years past, TurboTax has handled it without any issue, but this year, it's giving me a "You may be due a refund from your employer" message -- and I think in this case there is a bug in TurboTax that is causing this.

The error message lists one of my two W-2 forms, but the Box 4 (Social Security Tax Withheld) amount is actually the total across both of my W-2 forms. This is making it appear as if a single employer over-withheld -- which they didn't. 

Curious if anyone else has seen this. I'm on version [phone number removed].

[RaifH]

It sounds like two things are going on here. You are correct, if your Social Security is over-withheld due to changing jobs, the amount of additional withholding is returned to you on your 2021 tax return. TurboTax should make this calculation automatically. 

However, if any single employer over-withheld then they would need to re-issue a corrected W-2 and refund you the amount they over-withheld. It sounds like all your Social Security withheld is only being reported on one of the W-2s? I could not re-create this error. This may be due to an importing issue. Please ensure that the correct Box 4 amount is being reported from each of your employers. It should be 6.2% of the Box 3 Social Security wages up to a maximum of $8,854. 

[jtaylordfw]

I double checked my forms. Neither of my two employers over-withheld any social security taxes. I have entered each form accurately into TurboTax, but it is doing some sort of incorrect calculation in my case that is causing this error. 

[DianeW777]

If you do have two different employers, then the employers do not have access to the information about each other in reference to your income. For this reason they would not pay too much FICA on your wages.  In this case, any excess because you have earned more than $142,800 in wages when combined, the IRS will refund any excess social security tax because each employer would have paid it all to them.

On your tax return the excess will show up on line 11, of Schedule 3, Form 1040.  You can view your 1040 form before you e-file:

1. Open or continue your return. (TurboTax Online)
2. With the Tax Tools menu open, you can then:
   • View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu.
3. TurboTax CD/Desktop - Select Forms (upper right) > Scroll to Schedule 3 (left) > View line 11

Please update here if you have more questions and include more detail for clarification.

[jtaylordfw]

Hi Linda --

I went to the Forms section and my return doesn't have a Schedule 3 -- just Schedule 1 and Schedule 2.

The issue is that each W-2 entered is correct. Neither single employer over withheld SSA taxes. However, TurboTax seems to be taking the total of SSA taxes across both employers, then associating that with the first employer that I entered into the system, and that's why it's now telling me that first employer owes me a refund.

Is there a way I can open a support case with TurboTax so they can look into this issue?

[Vanessa A]

Recheck your entries to make sure it is not an entry error.  

Does your combined wages from your W2's total more than $142,800?  If so, and you had social security withheld on all of your wages, then you would have overpaid.  The income above $142,800 is not subject to Social Security withholdings. 

[jtaylordfw]

I've rechecked my entries. I've confirmed that each W-2 was entered correctly.  Yes, my combined wages is more than $142,800. I definitely overpaid, but because neither of my two employers last year over-withheld, I should be getting the overpayment back as a credit. I shouldn't have to contact the employer and request a refund. 

I think this is a bug in the software; how do I open a support case? 

[JamesG1]

@jtaylordfw

Are you able to view line 31 of the Federal 1040 tax return?  Are you given a credit in the amount of the overpayment?

You may view the entry under Tax Tools / Tools / View Tax Summary / Preview my 1040.

[jtaylordfw]

No - that line is blank (and in fact there is no Schedule 3 in the return).

[AliciaP1]

If TurboTax is telling you specifically that your first employer is the one who owes the refund they may have actually calculated your withholding wrong or made an error on your Form W-2.

To calculate your correct Social Security Tax withholding manually:

1. Use your reported Social security wages from box 3 on your W-2
2. Multiply that number by the Social Security Tax rate of 6.2%
3. The total should match the amount in box 4

Based on your original question and subsequent posts I think it must be wrong.  Regardless of whether it was misstated or miscalculated, your employer is responsible for correcting the Form W-2 and refunding you the excess withheld if that was the case.

See Topic No. 608 Excess Social Security and RRTA Tax Withheld for more specifics from the IRS.

[billcranecos]

I have the same problem.  Two employers.  Both withheld Social Security at a rate of 6.2%.  My income with either employer was below $142,800 and Social Security with either employer was below the $8853.60 max.  But together, my income exceeded $142,800 and combined too much social security was withheld.

According to this Intuit page (updated 12/20/2021), look under Multiple employers:

You don't need to take any action. We'll automatically add the excess to your federal refund or subtract it from federal taxes you owe, whichever applies.

The excess will appear as a tax credit on Line 11 of your Form 1040, Schedule 3.

https://ttlc.intuit.com/community/credits-and-deductions/help/can-i-get-a-refund-for-excess-social-s...

Unfortunately, my return does not seem to include Form 1040, Schedule 3 as indicated above and I don't have a sense that my desktop version of Turbo Tax premiere is properly handling this issue.

[billcranecos]

@JamesG1 

>> Are you able to view line 31 of the Federal 1040 tax return? 
>> Are you given a credit in the amount of the overpayment?

I'm having the same problem as well. Line 31 is not showing credit for social security overpayment.

Two employers. Annual income with either employer was below $142,800. Both employers properly withheld 6.2% for social security.

But the sum total for social security withholding is over $8,853.60 (by about $700).

Neither employer withheld too much. Both are well under the $8,853.60 limit and both properly withheld at 6.2%. Intuits states on the below web page that they will take care of this via Schedule 3, but I don't have a schedule 3 in my return (and line 31 above has no value). 

https://ttlc.intuit.com/community/credits-and-deductions/help/can-i-get-a-refund-for-excess-social-s...

[ErnieS0]

If you have excess social security from two different employers, you'll also see a message in the W-2 section that says Congrats! Looks like you're getting some cash back after TurboTax asks you to verify your entries @billcraneco.

The credit will appear on Schedule 3 line 11 which will transfer to Form 1040 line 31.

Double check your W-2 entries. If you are married, make sure your W-2s are listed under your name and not under your spouse's name.

[billcranecos]

@ErnieS0 

If you have excess social security from two different employers, you'll also see a message in the W-2 section that says Congrats! Looks like you're getting some cash back after TurboTax asks you to verify your entries @billcraneco.

No, this is NOT working as you describe. After verifying entries, I do NOT get a message congratulating me that I'm getting cashback. Instead, I get a message stating that I need to get a correct W-2c from an employer and I should not proceed until I have the corrected form.

TurboTax is not generating schedule 3, and Form 1040 line 31 has no value.

The screen I do get looks like this (sensitive info deleted, I've added some comments at the bottom of the screen shot)

The screen above seems to falsely state that EMPLOYER 2 withheld 9591.17 which is not true.  They only withheld 766.71 (which TurboTax says is the correct withholding).

This looks like a bug that needs to be fixed.

[JohnB5677]

I suggest that you re-check all of your W-2's.

You may have a posting error.

Pay close attention to entries from boxes 3 and 4.