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I had two W2s last year. I overpaid by about $2,000 because the second W2 didn't take into account the first W2. I am an employee with the first company and an employee + owner at the second company (via a S-Corp). I know I can get the overpayment on the employee side of things back by filling out Schedule 3 Line 11. But because social security is paid out by both the employee and the employer, I still overpaid by $2,000 on the employer side of things (since the $2,000 shouldn't have been withheld on the employee side since I was already over the threshold). How do I go about to get this overpayment from the employer perspective refunded? What forms should I fill out?

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The employer part is not overpaid since it is a tax on the employer, and not the employee (IRC Sec. 3111(a)):

In addition to other taxes, there is hereby imposed on every employer an excise tax...

This is different from the employee part which is governed by the IRC Sec. 3101(a).

In addition to other taxes, there is hereby imposed on the income of every individual a tax...

The tax rates are the same, and the wages on which the rate is based are defined for both of these taxes in the same IRC Sec. 3121(a), which is why the rates are the same but the cap for the former is per employer (because employer is being taxed) and for the latter is per individual (because individual is being taxed).

It doesn't matter how many different employers an employee has, each employer is taxed independently.

The employee SS withholding that is over the cap will be accounted for as a credit for taxes paid as part of your annual tax return, as you've described.

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  • Curious now if one (or both) employers could get a refund if OP notified them of the situation. I would presume the refund would go to the employer who unknowingly passed the cap, i.e. later in the year.
    – brichins
    Feb 22 at 4:23
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    @brichins as the answer clearly states - there would be no refunds because none of them passed their caps
    – littleadv
    Feb 22 at 4:33
  • While the IRS does clearly state each employer must withhold regardless of prior withholding, elsewhere the SSA states that the tax is "on the earnings", not on the employer - and gives a single max tax limit. The wording there is "employers and employees each pay 6.2 percent of wages up to the taxable maximum". To me this implies that the employer tax also stops when the employee hits the limit, regardless of prior employment, and the latter employer could also claim overpayment.
    – brichins
    Feb 22 at 5:00
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    @brichins as a general rule, when you're looking for authority - informational pages are not that. Even the IRS instructions are not a legal authority. The legal authority are Revenue Rulings, legal precedent of the appropriate circuit or SCOTUS, Code of Federal Regulations, and the statute. In this case - IRC Sec. 3111.
    – littleadv
    Feb 22 at 5:11
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    @brichins I added the references to my answer.
    – littleadv
    Feb 22 at 6:08

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