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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 Wage and Tax Statement in a return, and it's 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 2020 maximum social security wage base is $132,900. The information below is based upon the IRS instructions for Line 10 of Schedule 3 (Form 1040) Additional Credits and Payments

If you, or your spouse if filing a joint return, had MORE THAN ONE EMPLOYER for 2020 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 10.
  • 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:

  1. From within your TaxAct® Online return, click Print Center down the left to expand, then click Custom Print.
  2. Check what you wish to print (you may need to scroll down).
  3. Click Print, then click the PDF link. Click the printer icon or the save icon (available when you hover your mouse over 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 your return fees 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, then click the Printer icon once the worksheet is opened on your screen.

For additional information, please review IRS Publication 505 Tax Withholding and Estimated Tax.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.

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