The yellow alert Warning: Excess FICA Credit states in the TaxAct program:
"Return to the Wages topic and confirm that you have properly identified the owner of each Form W-2, W-2GU, W-2AS, and W-2VI, and W-2CM. A credit for excess FICA withholding of $XXX has been included on your return. If you have incorrectly labeled the ownership of a Form W-2, W-2GU, W-2AS, W-2VI, or W-2CM the credit may be disallowed by the IRS."
This Alert will appear if entries are made in the program that create an Excess FICA Credit on the return. This is often due to multiple Forms W-2 in a return, and it's indicated they belong to the same individual. Thus, the total social security tax (amount in Box 4 of each W-2) has exceeded the limit that can be withheld for each taxpayer for that year. This results in a credit on the return. As this credit can often be created in error due to not correctly designating the proper ownership on each W-2, the program alerts the user to review the information. The 2022 maximum social security wage base is $147,000.
For more information, go to IRS Publication 505 Tax Withholding and Estimated Tax.
Per IRS Instruction 1040, Schedule 3, Line 11:
If you, or your spouse if filing a joint return, had more than one employer for 2022 and total wages of more than $147,000, too much social security or tier 1 railroad retirement (RRTA) tax may have been withheld. You can take a credit on this line for the amount withheld in excess of $9,114.00. But if any one employer withheld more than $9,114.00, you can't claim the excess on your return. The employer should adjust the tax for you. If the employer doesn't adjust the overcollection, you can file a claim for refund using Form 843. Figure this amount separately for you and your spouse.
TaxAct automatically calculates any excess social security withheld from your wages and reports the excess on Schedule 3 (Form 1040), Line 11.
To view the worksheet that performs the calculation of excess FICA withholding, you need to view the it as a print PDF; if you need help, go to our Printing Your Return and Individual Forms FAQ.
If you're a desktop program user, you can navigate to the worksheet using the Forms Explorer.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.