Social Security and medicare taxes were wrongfully withheld from me in 2006. What do I do?

Question

I am a full time student working part time in a university. That means my wages from the university are not supposed to be subject to social security and medicare taxes. The people in human resources admitted that it was a mistake, but refused to give me the money back from last year. I'm pretty sure I need to fill out form 843, but I don't know if I need to fill out any other forms, or what evidence I should send in with those forms. Also, do I need a corrected W-2 form to show that these wages weren't subject to social security and medicare?

I went to payroll, not HR, my mistake. And yes, they are exempt from taxes. Payroll told me so, but they refuse to correct it.

http://www.irs.gov/govt/fslg/article/0,,id=112712,00.html

On this page, you will see this:
Are there any services that may be excluded from FICA?

Yes, the following services are excluded unless they are covered under a section 218 agreement:

1. Services of full-time students enrolled and regularly attending classes at the school, college or university where they are working. This includes students working for a section 509(a)(3) nonprofit entity organized for the benefit of the school, college or university. See IRC section 3121(b)(10).


You can also check out this link: http://www.irs.gov/irb/2005-02_IRB/ar11.html

I am supposed to be exempt from FICA (Social Security). If not, explain why they have now stopped withholding and admitted their mistake, and refunded my 2007 FICA withholding. Explain why none of my friends at the university have had FICA withheld. Explain the above links. I just want my 2006 FICA and Medicare money back, since it was wrongfully withheld.

Thanks to those actually answering my question, instead of trying to tell me that I'm wrong. :-)

Answer 1

There are some educational institutions that do not participate in Social Security and Medicare, so I do recognize your problem.

Payroll can't or doesn't want to pay you back, since they sent the money to the SSA. I would write a detailed letter to the head of the Payroll Department, cc to the CFO of the University, requesting a refund of your wages that were sent to SSA. The IRS wants overwithholding to be dealt with between the employee and employer, so try that first.

I don't see a reason to demand a corrected W-2 for your income tax return. The SS and Medicare withholding do not effect your income tax. Just file it as-is.

Form 843 doesn't look too promising to me, but you could try it and see. My guess is the IRS will tell you to get a refund from the employer, and the employer can amend their employment tax returns.

Answer 2

If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement. Attach the following items to Form 843:


A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld,
A copy of the page from your passport showing the visa stamp,
INS Form I-94,
If applicable INS Form I-538, Certification by Designated School Official, and
A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim. If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer.
If applicable, Form 8316,Information Regarding Request for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, or M Type Visa
File Form 843 (with attachments) with the IRS office where your employer's returns were filed. If you do not know where your employer's returns were filed, file Form 843 with the Internal Revenue Service Center, Philadelphia, PA 19255.

http://www.irs.gov/businesses/small/international/article/0,,id=104936,00.html

Answer 3

I read your link and looked it up myself. You ARE correct, they should not have taken taxes out on you. You will need to take your W2-Form to a Tax Professional and have them clear this up. You should get all of your money back according to the Law.. Good Luck

Answer 4

All over-payments of SSI are refundable.

Call, or visit your nearest SSI office. This can be corrected as long as you can show evidence that your wages shoud not be subject to deductions.

You can demand a "corrected" W2, but the original verifies the amounts actually remitted to the Gov.

Good luck. This could take several months.

Answer 5

I have no idea where you get the idea that your wages are exempt from SS and Med taxes. That is simply NOT true!

HR is not the place where payroll issues are handled. The payroll department handles that and they will gladly tell you that your wages are fully taxable.

Addendum: They told you wrong, then. All wages are subject to SS and Med taxes. Why would you think you are exempt??

Answer 6

I also have never heard of student's wages from working at the university being exempt from SS and medicare. there has to be more to this story.

Answer 7

There is the government at work again. My friend, your money is now being used to fund a no winning war. Good luck on getting it back, but I don't think you will see that money again.