Excess Soc Sec, Medicare by Payroll Provider

Technical topics regarding tax preparation.
#1
Bob A  
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One of the large well known Payroll Provider firms withheld and transferred through 941 deposits an excessive amount of social security ($3,000) and medicare ($700) from S Chapter employee (the shareholder). Employee gross wages were $80k and the excess amounts are reported as such on the employee W-2 boxes 4 and 6. Provider insists it can't correct the errors. How does the employer report the excess on 2021 1120S? ty
 

#2
sjrcpa  
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Were the excess amounts withheld from employee/shareholder's pay?
 

#3
Bob A  
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yes..... apparently the sh / employee asked the provider for a series of payroll checks during the slow summer months and indicated he only wanted soc sec and med taxes paid and not fed w/h ..... the payroll provider complied with net zero checks
 

#4
sjrcpa  
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Excess withholding is to be refunded by the Employer to the employee.
Amended 941s and corrected W-2 should be filed. Payroll provider should do this.
 

#5
MilesR  
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Yea pretty sure you can only get it back on the 1040 if you had withholding over the max due to 2 (or more) different employers. But if he's under the social security limit and just had too much SS withheld, then it has to be handled through employer and 941's amended to reduce it. The payroll providers typically just do whatever you ask and claim no responsibility on anything so I would expect them to charge him for the amendments. Even though they filed "wrong" numbers on there, they were just doing what he asked.

It seems weird though because it should have shown up as an overpayment on the 941 because the 941 has you multiply the wages by the percentage to calculate the tax, and then it has the line for payments. The payments should have been more than the tax due and refunded/applied forward.
 


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