How to Claim a Credit for Excess Social Security & RRTA Tax
If you held more than one job last year, you may be due a refund for overpaid Social Security taxes. Find out how to claim this credit on your return.
A portion of your earnings is withheld for Social Security and Railroad Retirement Tax Act (RRTA) contributions. These systems have an annual limit on the amount of earnings subject to tax. If you work for more than one employer in a year, you may find that the total amount withheld across all jobs exceeds this limit because each employer withholds taxes independently. The excess amount can be reclaimed as a credit or refund. This guide explains how to determine if you have overpaid and the precise steps to recover the excess funds.
How to Identify an Overpayment
To determine if you have overpaid Social Security or Tier 1 RRTA taxes, you must first know the annual earnings limit. For the 2025 tax year, the wage base limit is $177,000. This means you should not have paid the 6.2% Social Security or Tier 1 RRTA tax on any earnings above this amount.
The first step is to gather all Form W-2s you received from every employer for the tax year. On a standard W-2, locate Box 3 for Social Security wages and Box 4 for Social Security tax withheld. For those under the railroad retirement system, similar information for Tier 1 RRTA is typically detailed in Box 14, “Other,” of Form W-2.
Next, add together the amounts from Box 3 of all your W-2s and the Tier 1 compensation from your railroad W-2s. If this total is more than the $177,000 limit for 2025, you have paid too much tax. To calculate the exact credit, determine the maximum tax that should have been paid, which is $10,974 for 2025 ($177,000 x 6.2%). You can then find your overpayment by adding the Social Security tax withheld (Box 4) from all your W-2s and subtracting the maximum amount. For example, if your combined Box 4 amounts totaled $11,500, your credit would be $526 ($11,500 – $10,974).
Distinguishing Between Refund Scenarios
The method for recovering your overpaid tax depends on the circumstances of the withholding. Correctly identifying your scenario is necessary to use the proper procedure.
One Employer Withheld Too Much
If a single employer withheld Social Security or Tier 1 RRTA tax that exceeded the annual maximum of $10,974 in 2025, this is an employer error. This situation is not resolved on your personal income tax return. You must contact the employer’s payroll or human resources department directly to request a refund of the over-withheld amount.
Upon correcting the error, the employer must issue you a Form W-2c, Corrected Wage and Tax Statement. You should not file your tax return until you receive this corrected document.
Multiple Employers Caused the Overpayment
The more common scenario involves working for two or more employers. If your total earnings from all jobs exceeded the $177,000 wage limit, but no single employer withheld more than the $10,974 maximum, then no individual employer is at fault. In this situation, you must recover the excess Social Security or Tier 1 RRTA tax by claiming a credit on your federal income tax return. The overpayment is treated as a payment you made toward your federal income tax liability.
Claiming the Credit for Social Security and Tier 1 RRTA
The tax forms involved in this process are your main Form 1040 and Schedule 3, “Additional Credits and Payments.” The credit itself is claimed on Schedule 3, specifically on Line 11, “Excess social security and tier 1 RRTA tax withheld.”
The credit amount you entered on Schedule 3 is then included in the total on Line 15 of that same schedule. This total is then transferred directly to your main Form 1040, where it is entered on Line 31. By placing the credit on your Form 1040, it increases your total tax payments for the year, which will either increase your tax refund or decrease the amount of tax you owe.
Claiming a Refund for Excess Tier 2 RRTA Tax
The process for reclaiming overpaid Tier 2 RRTA tax is different from the one used for Social Security and Tier 1 RRTA. This credit cannot be claimed on your Form 1040. Instead, you must file a separate claim for a refund using Form 843, Claim for Refund and Request for Abatement.
This form is filed separately from your annual income tax return. You will need to attach a statement explaining your calculations, along with copies of your W-2s showing your railroad retirement earnings and tax withholdings.