Social Security tax has an annual wage limit, which means your employer should take only so much out of your wages. Medicare tax comes out of all earnings. Overwithholding on either or both of those taxes can happen if your employer made a payroll error. If you had more than one employer throughout the year, your employers together may have withheld too much Social Security tax. In either case, you can request a refund from the Internal Revenue Service.
Excess Social Security Withholding by Combined Employers
As of the time of publication, Social Security tax has an annual wage base of $118,500. If you had multiple jobs and your employers combined withheld more than the annual wage limit, you may request a refund on Form 1040. On line 69, write the excess amount you paid. If you’re using Form 1040A, add the excess amount in the sum on line 41. In the area to the left of that line, write “Excess SST” and put the credit amount. Your Social Security withholding by each employer is reflected on your W-2s, which you should attach to your 1040 when filing your return. You cannot request a refund for overwithholding of Social Security tax on Form 1040-EZ.
Overwithholding By One Employer
If a sole employer withheld excess Social Security and Medicare taxes, the easiest solution is to ask the employer for a refund. If the employer refuses, request a refund from the IRS by completing Form 843, Claim for Refund and Request for Abatement. You can get the form and its instructions from the IRS website.
Completing Form 843
Fill out the form as instructed. Include your personal information on the respective lines and write the refund amount on line 2. Check the “Employment” box on line 3, which indicates the type of tax. On line 7, give a detailed account of why you’re requesting the refund, and show how you came up with the amount. If you qualify for exemption from Social Security and Medicare taxes, as certain international students do, explain your exemption and that your employer erroneously withheld the taxes.
Attachments to Form 843
When explaining your situation on line 7, say that your employer has not complied with your request for a refund. Alternatively, you can attach a statement from your employer saying that you were denied the refund. If you need additional writing space, use additional sheets. Attach all relevant documents, including your W-2, to Form 843. Nonresident alien employees with specific types of visas must fill out and attach Form 8316 and provide immigration documentation.
Where to Send Form 843 and Processing Time
Mail Form 843 and supporting documents to the address of the service center where you’re required to file your return. A separate mailing address applies to nonresident aliens. Allow the IRS up to six months to process your request. If you change your address before a refund is sent, complete and mail Form 8822, Change of Address, to the IRS.
Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.