I wrote about this in the November, 2006 newsletter available at www.mdtaxes.com/news1106.html. Here is what I wrote:


Do You Work For More Than One Employer in 2006 and Earn More Than $94,200?

For 2006, each of your employers will withhold social security taxes from the first $94,200 (increasing to $97,500 in 2007) that you earn from them. If you work for more than one employer and your total salary from all sources exceeds that threshold, you'll have excess social security taxes withheld. Make sure to claim a credit for these excess taxes on your 1040 as additional federal taxes paid in.

For Example:

Let's say you work for two employers and earn $75,000 from each employer. Employer #1 will withhold $4,650 in social security taxes ($75,000 * 6.2%). Employer #2 will also withhold $4,650 in social security taxes - for a total of $9,300 in social security taxes withheld during the year. Since the maximum social security taxes that you should pay through payroll withholdings for 2006 is limited to $5,840.40, the excess of $3,459.60 counts as additional federal income taxes paid in by you.

A) Social security taxes withheld by Employer #1 $4,650.00

B) Social security taxes withheld by Employer #2 $4,650.00

C) Total social security taxes withheld during the year (A+B) $9,300.00

D) Social security max for 2006 $5,840.40

E) Excess social security taxes withheld (C-D) $3,459.60

Zip Code: 01801