Pub. 17, Chapter 38 - Other Credits
The following credits are refundable and are treated as payments of tax.
- Credit for excess social security tax or railroad retirement tax withheld.
- Credit from a regulated investment company.
Credit for Excess Social Security Tax or Railroad Retirement
Tax Withheld
Most employers must withhold social security tax from your wages. Certain
government employers (some federal, state, and local governments) do not have to withhold
social security tax.
If you work for a railroad employer, that employer must withhold tier 1
railroad retirement (RRTA) tax and tier 2 RRTA tax.
If you worked for two or more employers in 1999, too much social security tax
or RRTA may have been withheld from your pay. You can claim the excess as a credit against
your income tax. The following table shows the maximum amount of wages subject to tax and
the maximum amount of tax that should have been withheld in 1999.
Type of Tax |
Maximum wages subject
to tax |
Maximum tax that should
have been withheld |
|
|
Social Security
or RRTA tier 1 |
$72,600 |
$4,501.20 |
RRTA tier 2 |
$53,700 |
$2,631.30 |
All
wages are subject to Medicare tax withholding.
One employer. If any one employer withheld
social security or RRTA tax that exceeded the amounts in the preceding
table, you cannot claim the extra amount withheld by that employer as
a credit against your income tax. Your employer must adjust this for
you.
Joint return. If you are filing a joint return,
you cannot add the social security or RRTA tax withheld from your spouse's
wages to the amount withheld from your wages. Figure the credit separately
for both you and your spouse to determine if either of you has excess
withholding.
How to claim the credit. If you file Form
1040, enter the credit on line 62. If you file Form 1040A, include the
credit in the total on line 39. Print "Excess SST" and show
the amount of the credit in the space to the left of the line.
How to figure the credit if you did not work for
a railroad. If you did not work for a railroad during 1999, figure
the credit as follows:
| 1. |
Add all social security tax withheld (but not more
than $4,501.20 for each employer). Enter the total here |
|
| 2. |
Enter any uncollected social security tax on tips or
group-term life insurance included in the total on Form 1040, line 56 |
|
| 3. |
Add lines 1 and 2. If $4,501.20 or less, stop here.
You cannot claim the credit |
|
| 4. |
Social security tax limit |
4,501.20 |
| 5. |
Credit. Subtract line 4 from line 3. Enter the
result here and on Form 1040, line 62 (or Form 1040A, line 39) |
|
| 1. |
Add all social security tax withheld (but not more
than $4,501.20 for each employer). Enter the total here |
$4,960.00 |
| 2. |
Enter any uncollected social security tax on tips or
group-term life insurance included in the total on Form 1040, line 56 |
-0- |
| 3. |
Add lines 1 and 2. If $4,501.20 or less, stop here.
You cannot claim the credit |
4,960.00 |
| 4. |
Social security tax limit |
4,501.20 |
| 5. |
Credit. Subtract line 4 from line 3. Enter the
result here and on Form 1040, line 62 (or Form 1040A, line 39) |
$458.80 |
How to figure the credit if you worked for a railroad.
If you were a railroad employee during 1999, figure the credit as follows:
| 1. |
Add all social security and tier 1 RRTA tax withheld
(but not more than $4,501.20 for each employer). Enter the total here |
|
| 2. |
Enter any uncollected social security and tier 1
RRTA tax on tips or group-term life insurance included in the total on Form 1040, line 56 |
|
| 3. |
Add lines 1 and 2. If $4,501.20 or less, enter -0-
on line 5 and go to line 6 |
|
| 4. |
Social security and tier 1 RRTA tax limit |
4,501.20 |
| 5. |
Subtract line 4 from line 3 |
|
| 6. |
Add all tier 2 RRTA tax withheld (but not more than
$2,631.30 for each employer). Enter the total here |
|
| 7. |
Enter any uncollected tier 2 railroad retirement tax
on tips or group-term life insurance included in the total on Form 1040, line 56 |
|
| 8. |
Add lines 6 and 7. If $2,631.30 or less, enter -0-
on line 10 and go to line 11 |
|
| 9. |
RRTA tier 2 limit |
2,631.30 |
| 10. |
Subtract line 9 from line 8 |
|
| 11. |
Credit. Add lines 5 and 10. Enter the result here
and on Form 1040, line 62 (or Form 1040A, line 39) |
|
Credit from a Regulated Investment Company
You must include in your income any amounts that an investment company (for
example, a mutual fund) allocated to you as capital gain distributions, even if you did
not actually receive them. If the investment company paid a tax on the capital gain, you
are allowed a credit for the tax since it is considered paid by you. The company will send
you Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, showing
the undistributed capital gains amount and the tax paid, if any. Claim the credit by
entering the amount on line 63, Form 1040, and checking box a. Also attach Copy B of Form
2439 to your return. See Capital Gain Distributions in chapter
9 for more information on undistributed capital gains.
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