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We had too much Medicare tax withheld and TT calculates it correctly on Line 24 of Form 8959 but it doesn't pass through to Line 16 of my 1040. Why not?

Forum|Forum|7 years ago
June 3, 2019
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I had the additional 0.9% Medicare tax withheld on one of my W-2's, but our income does not exceed the limits, so we have overpaid Medicare tax for this year. In TurboTax 2018 Premier, I can see our overpayment, correctly calculated, on Line 24 of Form 8959. However, it does not end up being included in Line 16 of my 1040 (federal income tax withheld). Why isn't that amount passing through to the 1040?

TurboTax Premier Mac

Best answer by follette

After hours on the phone with TurboTax, we found the answer. If your income is less than the threshold, the IRS does not want you to use Form 8959 to get excess Medicare withholding back. They instruct you to work it out with your employer, or file a claim with them. See this answer for details: https://ttlc.intuit.com/questions/4677534-can-i-get-a-refund-for-excess-medicare-tax-withheld

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folletteAuthorAnswer

After hours on the phone with TurboTax, we found the answer. If your income is less than the threshold, the IRS does not want you to use Form 8959 to get excess Medicare withholding back. They instruct you to work it out with your employer, or file a claim with them. See this answer for details: https://ttlc.intuit.com/questions/4677534-can-i-get-a-refund-for-excess-medicare-tax-withheld

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nrsosdi

I believe this is incorrect. See following quote from irs.gov regarding use of 8959 when there is excess Medicare withholding:

29. My wages and self-employment income or my RRTA compensation do NOT exceed the threshold for my filing status, but my employer withheld 0.9 percent from my wages; do I need to file Form 8959?
Yes. If your employer withheld the 0.9% Additional Medicare Tax from your wages or compensation, and you will not meet the threshold based on your filing status, then the amount that was withheld from your wages or compensation may be refundable to you. Therefore, you need to file Form 8959, Additional Medicare Tax, to document the withholding and to receive a refund of any tax that was withheld in excess of the total tax owed on your individual income tax return.

The above seems to demonstrate that TurboTax is incorrect on this point and needs to be corrected.

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CherylW

Employee

It actually goes on line 72 of Schedule 5, which carries over to line 17 of Form 1040.

To see your 1040:

1. Go to Tax Tools on the left-hand side.

2. Go to Tools.

3. Go to View Tax Summary.

4. Click Preview my 1040 from the left-hand side.

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folletteAuthor

When I look at Line 72 of Schedule 5, there's no entry.  I think that may be correct, since this is not a an excess social security or RRTA.

Line 24 of Form 8959 has a positive number, which I assume means that I have overpaid and will receive a credit.  I still can't figure out where this credit should go, or why it isn't affecting my federal refund amount.

The other reason that suggests that the amount is not passing through is if I manually adjust my W-2 to have even greater (erroneous) Medicare withholding, there is no change to my estimated Federal Refund.

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Martin K

True that Turbotax will not carry the number on Form 8959 to the right place on the 1040 tax payment worksheet. But I have found the the easiest way to do this is in two steps: File electronically with the overwithholding and make sure the refund or payment is completed. Once the return is thus accepted ,file an amended return with the Form 8959. The advantage is the the paper amended return is just three sheets: 1040 X (2 pages) and the 8959. You may not want to do this if the difference is very large - mine wasn't.

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nrsosdi

Thanks for posting an easier workaround. If Intuit still doesn't correct this at least I can send in a smaller pile of paper to get my excess Medicare back.