Social Security taxes are withheld from the paychecks of all employees working in the United States up to the allowable maximums. Social Security tax is based on a flat percentage of salary and does not allow for deductions from your income like the income tax system, so refunds due to overpayment are rare. However, in some cases, a worker may pay too much in Social Security taxes and may be able to claim a credit for this overpayment and potentially receive a refund.
Social Security Tax Basics
The Social Security tax is based on a percentage of your salary. At the time of publication, you pay 4.2 percent of your income from employment in Social Security taxes. You pay this percentage on your first $110,100 in income, for a maximum of $4,624.20 per year. The IRS is responsible for collecting Social Security taxes. Your employer pays an additional 6.2 percent of your salary in Social Security taxes.
If you work for one employer and it withholds an incorrect amount of Social Security taxes, you need to ask your employer to correct its error and refund the overpayment. You cannot claim the overpayment on your income tax return and receive a refund from the IRS.
If you work for more than one employer you could potentially have too much Social Security tax withheld from your paycheck. Each employer must withhold the prescribed amount without respect to any other job you have. If you earned $120,000 per year in one job, that employer has already withheld the maximum amount in tax from you. If you work for another employer and earned $50,000, the second employer has withheld $2,100 too much, and you will need to claim a credit on your tax return.
Social Security Tax Credit
Form 1040, line 69 is where you can claim a credit for your overpayment. Add up the amounts from each of your Form W-2s for Social Security taxes withheld, and subtract $4,624.20 from that amount. The remaining amount is what you overpaid and is the amount of the Social Security tax credit you receive. You may claim this credit on Form 1040A as well, by writing the amount on line 44 and indicating "Excess SST" as the reason.
The Social Security tax credit is much like the amount of payroll taxes your employer withheld; it is a credit toward your potential tax liability. If your total tax credits are more than your tax liability, you will receive a refund. If your tax liability is higher than what your credits, you will need to pay the difference, even if you have a Social Security tax credit.
If you are not a U.S. citizen but worked in the United States, you had Social Security taxes withheld from your paycheck. Even if you are not eligible for benefits, you cannot request a refund of these taxes. However, you may be eligible for some Social Security benefits due to international agreements between the United States and other countries.