W-2s and Excess Social Security Payroll Taxes Withheld
Most employers must withhold Social Security tax from your wages. The tax is equal to 6.2% of your wages, up to a certain income cutoff set each year. For 2012, the limit is 6.2% of $110,100, or $6,826.20. The wage base limit can be found in the Form 1040 Instructions for each year.
Click a link for more information about excess payroll withholding:
If your total Social Security withholding (Box 4 on Form W-2) exceeds the limit because you worked for more than one employer, TurboTax calculates the maximum tax and claims the excess withholding as a credit against your income tax.
Exception
TurboTax handles multiple W-2s from the same payroll provider with the same Employer Identification Number (EIN) as multiple W-2s from the same employer. This situation can occur if you work at different jobs through the same placement or temp agency, which issues the paychecks.
In this case, you will need to ask your payroll provider to refund the excess social security tax to you, as required by law. Follow the directions in the section below.
If you receive more than one W-2 from the same employer, and the sum of withholdings exceeds the Social Security limit, the excess cannot be taken as a credit on your tax return. Instead, you need to contact your employer and request corrected W-2 forms along with a refund of your overpayment.
If your employer does not (or cannot) comply with your request, use IRS Form 843: Claim for Refund and Request for Abatement to get a refund of the overpayment. For additional details including how including how to compute the amount of excess credit, refer to Publication 505, Tax Withholding and Estimated Tax.
Don't file your return claiming excess social security tax withholding from the same employer, as you could face penalties and interest.
Excess Social Security tax withholdings can also occur when a user accidentally assigns a W-2 to the wrong spouse on a joint tax return. If you received an assessment notice from the IRS denying a credit for excess social security tax withheld on a joint return, most likely one or more W-2 forms were assigned to the wrong spouse in TurboTax.
Whenever you enter a too-high Social Security tax amount, TurboTax will ask you to verify your entries, as shown below. From this screen, you can double-check your entries and make any needed corrections.
For more information on Tax Withholding and Estimated Tax, see
.
