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<<When a business withholds social security on employees beginning in January and then gets bought
out by another company (but no change in employees) who has a new ID#, can the payroll
department beginning say in February give credit to each employee for amount withheld in January
by the old company or must it start at zero for purposes of determining the maximum SS
withholding for the year? Some employee salaries will far exceed the maximum amount of earnings
subject to SS tax. Obviously, if they are not granted credit, some employees will have over withheld
SS taxes that will have to be returned when they file next year.>>

KAT in Chicagoland gave you a terrific answer. If you haven't read it, you should do so. And you would be surprised how many tax pros do NOT know about this exemption. But, as KAT also pointed out, the circumstances can be somewhat narrow in application. So check with your payroll people to see how your company stands on the issue.

And, as you note, even if you do get smacked with double FICA tax, you can receive the excess FICA withheld (but not the medicare portion) at the end of the year when you file your individual income tax return.

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