Excess social security tax withheld happens when an employee pays more social security tax than is required. The social security tax is a percentage of an employee's earnings, and there is a limit on the amount of income that is taxed for social security each year. This limit is set by the government and can change annually. When someone works for multiple employers in a year, it’s possible that their total income exceeds this limit, leading to more tax being withheld than necessary.
Excess social security tax withholding can happen due to several reasons:
If you find that too much social security tax has been withheld from your paycheck, you can take the following steps:
Knowing about excess social security tax withholding is important because it helps you manage your finances better. Here’s why:
If you have excess Social Security tax withheld from your paycheck, you may be eligible for a refund when you file your federal income tax return. The maximum amount of Social Security tax that can be withheld is based on a set income limit, and if your total earnings exceed that limit, any excess amounts deducted will be refunded to you.
If you find that you have paid more in social security tax than necessary, you should review your pay stubs and tax documents to confirm the overpayment. Afterwards, you can file a claim for a refund with the IRS using Form 843.
To claim a refund for excess social security tax withheld, you need to file Form 1040 or 1040-SR and report the total amount withheld on your tax return. Any excess will be refunded to you after the IRS processes your return.
To be eligible for a refund of excess social security tax withheld, you must have had more than the maximum allowable amount withheld from your wages during the year. Typically, this applies if you worked for multiple employers and collectively exceeded the limit set by the IRS.
To determine if you have overpaid your Social Security tax, compare the total amount withheld from your paychecks to the annual wage base limit for Social Security. If your withholding exceeds that limit, you may be eligible for a refund of the excess amount when filing your tax return.
Trusted by Creatives and Small Businesses Nationwide.
