The IRS has issued a final revenue procedure that covers how to obtain employees’ consent before you refund overwithheld FICA taxes to them. The IRS made only minor changes to the procedure it proposed in 2015.
What’s new: You may truncate employees’ Social Security numbers (SSNs), but only if you prepopulate your consent forms with those truncated SSNs.
This revenue procedure applies to employees’ consent requested on or after June 5, 2017, but you don’t have to resolicit employees for pending refunds and you can rely on the proposed procedure until June 5. (Rev. Proc. 2017-28, IRB 2017-14)
They get theirs before you get yours. You usually can’t receive a refund of the employer’s share of overwithheld FICA taxes until you refund employees their share of the overwithheld taxes or obtain their consent to pursue refunds on their behalf. Key: These rules don’t apply to refunds of overwithheld additional Medicare taxes.
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