How to Handle Overpaid Social Security Tax From Two Jobs

Employees with multiple jobs in a tax year may overpay Social Security taxes. This happens because each employer withholds taxes independently, and an overpayment occurs when the combined income surpasses the annual limit. The Internal Revenue Service (IRS) provides a process for workers to claim a refund for these excess contributions.

Understanding the Social Security Wage Base Limit

The Federal Insurance Contributions Act (FICA) mandates that employers withhold taxes to fund Social Security. Unlike the Medicare tax, the Social Security tax has an annual earnings limit. This cap, known as the Social Security wage base limit, is the maximum amount of earnings subject to the tax in a given year. For the 2025 tax year, this limit is set at $176,100.

The Social Security tax rate is 6.2% for the employee. An overpayment happens when combined earnings from multiple employers exceed the annual wage base limit. Each employer withholds the 6.2% tax on the wages they pay, up to the threshold, without knowing what the other has withheld.

For example, if an employee earns $100,000 from two separate jobs in 2025, each employer will withhold Social Security tax on that full amount. The employee’s total income of $200,000 is above the $176,100 limit, meaning they have paid tax on earnings that should have been exempt.

Calculating Your Social Security Tax Overpayment

To determine if you have an overpayment, you will need the Form W-2 from each of your employers. If the total of your Social Security wages (Box 3 on all W-2s) is less than the annual wage base limit, you have not overpaid.

If your total wages exceed the limit, follow these steps to calculate your credit:

• Add the amounts from Box 3 of all your W-2s to get your total Social Security wages.
• Add the amounts from Box 4 of all your W-2s to find the total Social Security tax you actually paid.
• Calculate the maximum tax required for 2025 by multiplying the wage base limit of $176,100 by 6.2%, which equals $10,918.20.
• Subtract the maximum required tax ($10,918.20) from the total tax you paid (the sum of Box 4 amounts) to find your overpayment amount.

For instance, if your total Social Security wages were $200,000 and you paid $12,400 in tax, your overpayment would be $1,481.80 ($12,400 – $10,918.20). This is the amount you can claim as a credit.

How to Claim a Refund for Excess Social Security Tax

You can claim your overpaid Social Security tax as a credit on your federal income tax return. The credit is reported on Schedule 3 (Form 1040), Additional Credits and Payments. You will enter the calculated overpayment amount on the line for “Excess social security and tier 1 RRTA tax withheld,” which then flows to your main Form 1040.

This credit reduces your overall tax liability for the year. If the credit is larger than your tax liability, or if you do not owe any tax, the excess amount will be added to your total tax refund.

This tax credit is available only when the overpayment results from working for two or more employers. If a single employer withheld more than the maximum, you cannot claim it on your tax return; the employer is responsible for refunding the excess amount to you. Even if your income is low enough that you would not normally be required to file, you must submit a Form 1040 to claim the credit from multiple jobs.