How to Calculate Your Refund if You Overpaid Social Security

If you only work for one employer during the year, you should not have any problems with your employer taking out too much money for Social Security taxes. However, if you work for multiple employers, the two employers do not know how much the other withheld, so if your total income exceeds the annual limit for Social Security payroll taxes, you may be entitled to a refund for having too much withheld. To figure out how much of a refund you will receive, you need to know your total withholdings, the Social Security rate and the maximum income subject to Social Security taxes.

Instructions

1. Look up the Social Security employee rate and the maximum income to which Social Security tax applies on the Social Security Administration website. In 2011, the rate equals 4.2 percent for employees and applies to up to $106,800 of income.

2. Multiply the Social Security rate by the maximum income to find the maximum Social Security taxes you should pay for the year. For example, in 2011 the maximum you should pay equals $4,485.60.

3. Add the Social Security taxes paid from each of your jobs to find the total Social Security taxes withheld. For example, if one employer withheld $4,000 and the other withheld $3,000, your total withholding for Social Security equals $7,000.

4. Subtract the maximum Social Security taxes due from the amount you paid to calculate your refund. In this example, subtract $4,485.60 from $7,000 to find you are entitled to a refund of $2,514.40.

References

• Social Security Administration: Social Security & Medicare Tax Rates
• Social Security Administration: OASDI and SSI Program Rates & Limits, 2011