What is Excess Social Security withholding?
In short
An employee who works for more than one employer may have Social Security tax withheld on combined wages above the annual wage base. The excess is claimed as a refundable credit on the employee's return.
Key takeaways
- If a single employer over-withholds, the employee gets the refund from that employer, not on the return.
- There is no wage base for Medicare tax, so it is never over-withheld this way.
- Each employer still pays its own matching share without a refund.
Where it's tested
REG: Employee Benefits & Payroll Tax — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An employer provides each employee with a $50 gift card at year end and a $50 holiday ham. How are these treated for the employees?