Additional Medicare Tax not included on Form 1040 line 16 as federal withholding

[kmccoy]

1. Client has over-withheld Medicare tax of $287. 

2. Form 8959 reconciles this amount properly but the $287 does NOT flow to Form 1040, line 16 as the Form instructs.

Is Proseries aware of this error and do they intend to issue a patch?

[Terry53029]

I believe if you only have one employer, then you have to get it back from employer

[abctax55]

:+1:

[rbynaker · Accepted solution]

I did one yesterday that worked correctly (well, $1 off due to rounding, but close enough).  What are the numbers from the W-2(s) boxes 5 & 6?

[Marc-TaxMan]

me too.   

[abctax55]

Is the over-withholding from just one W-2?

If so, that over-withholding has to refunded by the employer, not via the F 1040.

[sjrcpa]

Overwithheld Medicare or extra Medicare withholding because he is a high earner?

You're saying Form 8959 has $287 on Line 24 and this is not being included in federal withholding?

[kmccoy]

Single client has 2 W-2s from different employers, total Medicare wages are 191,394, total withholding is 3,062, should be 2,775. It is no doubt the employer's mistake but Form 8959 Line 24 shows $287. It is simply not carrying to the 1040 as Line 24 instructs: "also include his amount with federal withholding on Form 1040, line 16".

The form instructions say nothing about recovering from the employer, so I can only assume it should be recovered on the 1040 just like excess SS would be. Therefore I believe Proseries is not handling this correctly.

[rbynaker]

There are two concepts in play here.  Over-withheld taxes (employer screwed up, employer needs to refund) and Additional Medicare Tax (employer followed the rules, IRS needs to refund/count as a payment).

Since your box 5 amount is below the $200,000 threshold where Additional Medicare tax would kick-in, this one is clearly an employer screw up.  Figure out which employer made the mistake and your client will need to go back to that employer and get a refund.

[sjrcpa]

:+1: