Yellow Alert - Excess FICA Credit

The yellow alert Warning: Excess FICA Credit states:

"Return to the Wages topic and confirm that you have properly identified the owner of each Form W-2, W-2GU, W-2AS, and W-2VI, and W-2CM. A credit for excess FICA withholding of $XXX has been included on your return. If you have incorrectly labeled the ownership of a Form W-2, W-2GU, W-2AS, W-2VI, or W-2CM the credit may be disallowed by the IRS."

This Alert will appear if entries are made in the program that create an Excess FICA Credit on the return. This is often due to multiple Forms W-2 in a return, and its indicated they belong to the same individual. Thus, the total social security tax (amount in Box 4 of each W-2) has exceeded the limit that can be withheld for each taxpayer for that year. This results in a credit on the return. As this credit can often be created in error due to not correctly designating the proper ownership on each W-2, the program alerts the user to review the information.

Additional Information

The 2019 maximum social security wage base is $132,900. The information below is based upon the IRS instructions for Line 11 of Schedule 3 (Form 1040) Excess Social Security and Tier 1 RRTA Tax Withheld:

If you, or your spouse if filing a joint return, had MORE THAN ONE EMPLOYER for 2019 and total wages of more than $132,900:

  • Then you can take a credit for the amount of social security tax withheld in excess of $8,239.80 ($132,900 x 6.2%).
  • TaxAct automatically calculates any excess social security withheld from your wages and reports the excess on Schedule 3 (Form 1040), Line 11.
  • The excess social security amount is calculated separately for each spouse, if filing a joint return.

If any ONE employer withheld more than $8,239.80 in social security tax from your (or your spouse's) wages:

  • You must ask that employer to refund the excess to you.
  • You cannot claim the excess withheld as a credit on your return.

To view the worksheet that performs the calculation of excess FICA withholding that appears on Schedule 3 (Form 1040), Line 11:

  1. From within your TaxAct® Online return, click Print Center in the left column.
  2. Click Custom Print
  3. Click the checkbox(es) to the left of what you wish to print (you may need to scroll down).   
  4. Click Print and then click the PDF link. Click the printer icon or the save icon (available when you hover your mouse over the bottom of the PDF form) to print or save the PDF copy.

Note: If you see a message indicating you have not paid your return fees, click the View/Pay link, which will direct you through the Paper Filing steps. Continue through the screens until you have processed the payment for your product fees and then repeat the steps to print. 

Desktop users: Navigate to the worksheet using the Forms list, and then click the Printer icon once the worksheet is opened on your screen.

For additional information, please review IRS Publication 505.