Ask The Taxgirl: Social Security Overpayments

Taxpayer asks:

Hi, I work for a company and am currently deployed to Iraq. I had met the Social Security Cap for withholding mid 2008 and mid year was transferred to our subsidiary. They again withheld my Social Security to the Cap so in effect I paid double the amount I should have. Can I get that overpayment returned from Social Security and if so, how?

Thanks,

Taxgirl says:

The earnings cap for Social Security withholding is $102,000 for 2008 (it’s $106,800 for 2009). There is no earnings cap for Medicare withholding – all wages are subject to Medicare tax.

The overpayment issue depends on the identity of the employer. If you had more than one employer and you had too much Social Security withholding, you may be able to claim the excess as a credit against any income tax due. You’ll claim this on line 65 of your form 1040 (see image below). You’ll add the overpayment together with any estimated payments and credits and subtract those from the tentative tax due. If your overpayment, estimated payments, and credits exceed your tax due, you’ll receive a refund.

However, if any single employer withheld too much Social Security withholding, you should not claim this on your tax return: your employer should make an adjustment for you. If the employer does not make an adjustment, you can use Form 843 (available here as a pdf) to claim a refund.

Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
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Kelly Phillips Erb

Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.

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