How to File for a Social Security Tax Overpayment Refund

The Internal Revenue Code sets the maximum amount employers may withhold from paychecks for Social Security tax in one fiscal year. But a problem sometimes occurs when you change jobs within the same year: Not knowing how much has already been withheld, your new employer may inadvertently deduct too much from your paycheck, throwing your Social Security contributions over the limit. Mistakes also happen and the same employer you had all year might deduct more than necessary from your income. For each situation, the Internal Revenue Service offers a solution for you to obtain a refund.

Multiple Unaware Employers

Step 1

Add the amounts in Box 4 of the Form W-2 you receive from each employer at the start of tax-filing season. Box 4 reports how much Social Security tax was withheld.

Step 2

Deduct the total you calculated in Step 1 from the maximum Social Security tax for that year. In 2012, for example, the tax is capped at 4.2 percent of $110,100, or $4,624.20.

Step 3

Transfer the result of the calculations you in did in Step 2 to Line 69 of IRS Form 1040 or Line 41 of Form 1040A. If you file your federal return on the 1040A, write “Excess SST” on the line in addition to the amount you overpaid. Finish preparing your tax return and submit it to the IRS.

One Mistaken Employer

Step 1

Bring the mistake to your employer’s attention and ask for a refund. If he does not issue a refund, go to Step 2.

Step 2

Complete IRS Form 843. The form refers to Social Security taxes by its other name, FICA. Provide your personal information and fill out Lines 1 to 3. On Line 3, check the “Employment” box. Go to Line 7 and explain the reason for your refund request. Sign and date the form.

Step 3

Obtain a statement from your employer that discloses any portion of the overpayment he has reimbursed you. If the employer chooses not to provide the statement, you may write one that offers the same information and explains why you cannot submit to the IRS a note prepared by the employer.

Step 4

Attach the statement and the Form W-2 that shows the overpayment to Form 843. Mail the 843 and supporting documents to the same address where you would send your federal tax return.

Items you will need

  • All W-2s for the year
  • Calculator
  • IRS Form 1040 or 1040A
  • IRS Form 843

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About the Author

Emma Watkins writes on finance, fitness and gardening. Her articles and essays have appeared in "Writer's Digest," "The Writer," "From House to Home," "Big Apple Parent" and other online and print venues. Watkins holds a Master of Arts in psychology.

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