An employee who works for more than one employer and has exceeded the Social Security wage base may:

• A. Take a credit against federal income tax on Form 1040
• B. Demand that the employer refund the overage
• C. Apply the social security tax to next year's withholdings
• D. Apply the overage to benefits paid at age 65

Answer: (A)

When you earn wages from more than one employer, the Social Security tax is capped at the wage base for the year on an individual basis, not per employer. If your combined earnings exceed that cap, the total Social Security tax withheld across all jobs can end up higher than what is actually due.

The way this excess is handled is by giving you a credit against your federal income tax on your Form 1040. In other words, the overwithheld Social Security tax reduces your tax liability for the year, rather than being refunded by the Social Security Administration or carried forward to next year. This is why the correct action is to claim the excess as a credit on your 1040.

Why the other options don’t fit: you don’t get a direct refund of the overwithheld amount from the employer, you don’t carry the excess into the next year’s withholdings, and you don’t apply the overage to future Social Security benefits. The IRS treatment is to allow a credit against your federal income tax for the excess.