Can employers get a tax refund on Social Security and Medicare taxes we matched for employees?

I recently started my own graphic design business with a small team of 5 employees. We've been operational for about 7 months now, and I'm still learning the ropes of all the financial and tax obligations. I've been dutifully paying the employer portion of Social Security and Medicare taxes (matching what's withheld from my employees' paychecks), but I'm wondering if any of this comes back to us at tax time? When I was filing estimated quarterly taxes, my accountant mentioned something about deductions for business expenses, but I wasn't clear if the SS and Medicare taxes we match count in that category or if we can get any kind of refund on those specifically. I'm trying to plan our finances for next year and understanding if any of these payroll taxes are potentially refundable would be super helpful. Does anyone know if employers can get any of that back when filing taxes?

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18 comments

Sasha Reese

•8M

So the short answer is no, employers typically cannot get a "refund" on the employer portion of Social Security and Medicare taxes that they've paid - those are considered a cost of having employees. However, these taxes are deductible as a business expense on your income tax return. That means while you don't get the actual FICA taxes refunded, you do get to deduct them from your business income, which reduces your overall taxable income and therefore your income tax liability. Also, there's something you should know - if you accidentally overpaid these taxes (like if you calculated incorrectly), you can claim a refund for the overpayment by filing Form 941-X. But that's different from getting a refund on properly paid employment taxes.

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Sasha Reese

•8M

That's exactly right - you can't get the actual FICA taxes refunded, but you do get the tax benefit of deducting them as a business expense. How you claim the deduction depends on your business structure. If you're a single-member LLC filing as a sole proprietor, then yes, you'd include these expenses on your Schedule C. If you're an LLC filing as an S-Corp or partnership, you'd claim these on your business tax return forms (Form 1120-S for S-Corps or Form 1065 for partnerships).

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Muhammad Hobbs

•8M

It definitely works for all business structures - S-Corps, C-Corps, partnerships, sole props, everything. The system is designed to handle the different tax treatments for each entity type and explains which forms you need and where to claim deductions. For your question about AI vs. accountants, it's actually complementary to what accountants do. It analyzes your specific documents and gives personalized explanations, not just general info. I still use my accountant, but I understand everything better now and catch things my accountant might have missed because I can ask unlimited questions about my specific situation.

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Diez Ellis

•8M

Just wanted to follow up about taxr.ai - I decided to try it despite my skepticism and wow... It actually delivered. I uploaded my books and payroll reports and it immediately identified that I had been overpaying on FUTA taxes because I wasn't applying the credit reduction correctly. It explained how to file for a refund using Form 941-X for the overpayment and showed exactly where to deduct the correct employer portion of FICA on my business return. The explanations were super clear and specific to my LLC's situation. Definitely not just generic info I could Google.

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Vanessa Figueroa

•8M

It's not about getting to the "front of the queue" exactly. The system uses automated technology to navigate the IRS phone tree and wait on hold for you. They call you back once they reach a human agent, then connect you directly. So you're still in the same queue as everyone else, but you don't have to personally wait on hold for hours. And no, they don't just keep you on hold themselves. The technology dials in, navigates the menu options for you, waits in the queue, and then when an agent answers, it calls your phone and bridges the connection. You literally get a call when there's an actual IRS human on the line ready to talk to you.

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Sadie Benitez

•8M

I need to eat some crow here. After commenting that Claimyr sounded like BS, I was desperate when I got a CP2100 notice about mismatched employer tax info that could have resulted in penalties. Called the IRS business line and waited 3+ hours before giving up. Reluctantly tried Claimyr and got connected to an actual IRS agent in 22 minutes. She helped me resolve the notice issue AND confirmed what others said here - employer portions of SS and Medicare aren't refundable but are deductible business expenses. The service actually works exactly as described.

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Drew Hathaway

•8M

Yes, eligible employers can still claim the Employee Retention Credit retroactively by filing amended payroll tax returns (Form 941-X) for applicable quarters from 2020 and 2021. The statute of limitations gives you three years from the original filing date. However, be extremely careful with this. The IRS has flagged ERC claims as a high-audit area because of widespread abuse. Only claim it if you truly meet all the eligibility requirements about business disruption or revenue decline during the pandemic. Many businesses that started after the pandemic (like OP's) wouldn't qualify at all.

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