Social Security tax withholding confusion - calculated before or after Medicare deduction?

Thank you! That's what I was hoping to hear. So if I have a $2,800 benefit and choose 10% withholding, they'll withhold $280 for taxes, then take out the Medicare premium from the remainder. Appreciate the quick answer!

Is the W-4V the same as the regular W-4 form that employers use? My wife and I both have pensions plus Social Security and I'm super confused about all the different withholding forms!

No, they're different forms. The W-4V (Voluntary Withholding Request) is specifically for federal benefit payments like Social Security. The regular W-4 is used for employer withholding. For your pension withholding, you'd typically use a W-4P form, which is designed for periodic pension payments. Each income source has its own withholding form and process.

That's an interesting point about quarterly payments. Did you find it difficult to calculate the right amount? I'm worried I'll either withhold too much or too little. How did you figure out you needed to adjust three times?

Our first calculation was WAY off because we forgot about some dividend income. Then we increased it but it still wasn't enough. Third time was the charm! If your income is pretty stable, SS withholding works fine. If you have variable income from investments or part-time work, quarterly payments give more control. There's a worksheet on the IRS site (Form 1040-ES) that helps calculate it.

Two months to process?! Oh no, I was hoping to get this taken care of quickly. Thanks for the heads up about the delays. I'll submit the form tomorrow as planned. And thanks for the Claimyr tip - I might need that if I don't see the withholding start within a reasonable time.

My tax guy told me the same thing about the 85% rule. Surprised me when I first found out! SS benefits aren't really "tax free" if you have other income.

Thank you for breaking this down! Yes, our combined income will definitely put us in the 85% taxable range. That's exactly why I'm trying to set up withholding now rather than face a big tax bill next year. It was quite a shock to realize how much of our SS would be taxed.

Yes, you can change your withholding percentage at any time by submitting a new Form W-4V. There's no limit to how many times you can change it during the year. Just be aware that it may take several weeks for each change to be processed and implemented.

Good point! I moved from Connecticut to Georgia last year and was pleasantly surprised to learn GA doesn't tax SS benefits. Made a big difference in our tax situation.

That's a great point I hadn't considered. We're in Minnesota which does partially tax Social Security based on income levels. I'll need to look into state withholding options too. Thanks for bringing this up!

Yes, if you overwithhold from your Social Security benefits, you'll receive the excess amount as a refund when you file your tax return, just like any other tax overpayment. It gets treated the same as excess withholding from wages or other income sources.

That's absolutely not true. You can start, stop, or change your withholding at any time by submitting a new Form W-4V. If you want to stop withholding completely, you would select the "No Federal Income Tax Withheld" option on the form. Your sister may have confused this with something else, but withholding from Social Security benefits is completely voluntary and can be modified whenever you wish.

That's really helpful advice about calling the IRS withholding calculator hotline! I didn't even know that existed. Do you happen to remember what number you called? I've been trying to figure out the right percentage on my own and it's been pretty overwhelming with all our different income sources. And great tip about keeping that first 1099-SSA form - I'll make sure to do that once the withholding kicks in.

I don't have the exact number memorized, but if you search "IRS withholding calculator phone" on their website you should find it. I think it was something like 1-877-777-4778 but definitely verify that on irs.gov before calling. They were really patient with me and helped me understand how all the different income streams work together for tax purposes. Way better than trying to muddle through those worksheets on my own! Good luck with getting your withholding set up.

Thank you for mentioning the separate forms requirement! I hadn't realized my husband and I would need individual W-4V forms. That's really helpful to know before I go to the SSA office tomorrow. I was planning to try to handle both of our withholding situations at once, but now I know to bring separate paperwork for each of us. And great advice about asking for a receipt - I definitely want to be able to track that the forms were actually received and processed. Six weeks seems like a long time to wait, but at least I'll know what to expect. Really appreciate you sharing your recent experience with this process!

That's such a valuable point about RMDs! I'm 71 so I haven't hit that yet, but my husband is 74 and we completely forgot his IRA distributions would factor into our tax situation. Thank you for mentioning that - I need to pull out his RMD paperwork and factor that into our withholding calculations too. It sounds like starting at 10% and then adjusting based on how things look mid-year is a smart approach. I really appreciate you sharing the lessons you learned from your experience - it's exactly the kind of real-world advice I was hoping to get from this community!

Rick, this is really concerning information that contradicts what everyone else has been saying! Can you share more details about these letters you received from SSA? Were they official correspondence explaining your specific withholding setup? I'm supposed to go to the SSA office tomorrow to submit my W-4V forms and now I'm worried I might get incorrect information. Did you submit your W-4V online like you mentioned, and if so, can you share that process? This is such an important distinction - withholding on $3400 vs $4000 in your example would be a $72/month difference! I really need to get this clarified before I set up our withholding.

@Brandon Parker , I think that the SSA s'online Voluntary Tax Withholding is not computing the withholding correctly. I used that in early July this year as soon as it became available in my SSA account. My first withholding was done in August. The withholding was taken not from the entire Social Security benefit but from the amount reduced by the Medicare premium, which doesn t'make sense. I just asked Co-Pilot if that was an error, and it stated it was. I m'wondering if the problem is with how DOGE or the SSA implemented the Voluntary Tax Withholding since neither are tax experts. Ironically, (the error benefits me for now because I want as much withheld as possible. Withholdings are treated as if they were taken evenly through the year.

This is really confusing now! @Rick B and @Dana Mulvany, you re'both saying the withholding is calculated AFTER Medicare deductions, which is the complete opposite of what everyone else in this thread has been saying. @Dana Mulvany, you mentioned this might be an implementation error with the online system - that s'pretty concerning if SSA s'own online tool is calculating withholding incorrectly! I m'supposed to submit my W-4V forms tomorrow and now I have no idea what to expect. Should I avoid the online system and stick with paper forms? Or should I just pick a withholding percentage and then monitor my first few benefit statements carefully to see which method they re'actually using? This is exactly the kind of confusion I was hoping to avoid by asking here first!

This is really troubling to hear! I'm a newcomer here but I've been researching this exact issue for weeks before my benefits start next month. The conflicting information about whether withholding is calculated before or after Medicare deductions is exactly what's been driving me crazy - I've gotten different answers from different SSA representatives too. @Rick B, would you be willing to share what specific documents you received that spelled this out? I'm wondering if there might be different procedures for different types of benefits or if this is a recent policy change that hasn't been widely communicated yet. @Dana Mulvany, your point about this potentially being an implementation error with the online system is really concerning. If SSA's own online tool is calculating withholding incorrectly, that's a major problem that needs to be escalated. I think I'm going to hold off on submitting anything until this gets clarified. Does anyone know of an official SSA publication or regulation that definitively states the order of deductions? This thread has been incredibly helpful but now I'm more confused than when I started!

This is really eye-opening and concerning! As someone who's been putting off setting up withholding because I couldn't get straight answers, this contradiction between what Rick and Dana are experiencing versus what everyone else has said is exactly why I've been hesitant to move forward. @Rick B, could you clarify - when you say you received "letters from SSA spelling this out," were these official benefit statements showing the actual calculations, or were they explanatory letters about how withholding works? I'm wondering if there might be a difference between what SSA says they do versus what their systems actually calculate. @Dana Mulvany, your point about this potentially being a DOGE or SSA implementation error is really alarming. If their own online system is calculating withholding incorrectly, that suggests there might be widespread confusion even within SSA about the proper procedure. I think at this point I'm going to submit my W-4V with a conservative percentage and then watch my first few benefit statements like a hawk to see exactly how they're calculating it. Once I know for sure how MY withholding is being processed, I can always adjust the percentage accordingly. Thanks to everyone for sharing their real-world experiences - even the conflicting information is valuable because it shows this isn't as straightforward as it should be!

This discrepancy is really alarming! As someone new to Social Security benefits, I was relying on this thread to understand how withholding works, but now I'm seeing completely contradictory information from people with actual experience. @Rick B, I'm really curious about those SSA letters you mentioned. Were they official benefit calculation statements or policy explanation letters? The specific example you gave (withholding 12% of $3400 after Medicare deductions rather than 12% of the full $4000) would make a significant difference in withholding amounts. @Dana Mulvany, your point about a potential implementation error is concerning. If SSA's online system is incorrectly calculating withholding after Medicare deductions when it should be before, that could affect thousands of people's tax situations. I think this highlights why so many people get confused about Social Security procedures - even SSA representatives seem to give different answers! At this point, I'm wondering if the safest approach is to start with a slightly higher withholding percentage to account for the uncertainty, then adjust once we see how it actually gets calculated on our statements. Has anyone tried calling SSA's main number to get clarification on this specific calculation order?

This conflicting information is really concerning! I'm a newcomer here and was planning to set up withholding soon, but now I'm completely confused about how it actually works. @Rick B, your example showing withholding calculated AFTER Medicare deductions is the complete opposite of what everyone else has been saying throughout this thread. Could you possibly share a photo or screenshot of the official SSA documentation you received? I think many of us would benefit from seeing the actual language they used to describe the calculation order. @Dana Mulvany, if there really is an implementation error with the online system, that's a huge problem that affects everyone using it. Has anyone tried contacting SSA directly to report this discrepancy? At this point I'm wondering if different SSA offices or systems are handling this differently, which would explain why people are getting such contradictory information from representatives. This is exactly the kind of administrative confusion that makes dealing with government benefits so frustrating!

This is really concerning! As a newcomer who was planning to set up withholding next week, I'm now completely confused by these contradictory experiences. @Rick B, could you clarify what type of SSA correspondence you received that showed withholding calculated after Medicare deductions? Was this an official benefit statement or an explanatory letter? @Dana Mulvany, if the online system is truly calculating withholding incorrectly, that's a major issue that could affect thousands of people's tax situations. I think at this point I need to see actual documentation or get multiple sources to confirm which method is correct before I submit any W-4V forms. Has anyone considered filing a complaint with SSA about this inconsistency? This kind of conflicting information from what should be a standardized federal process is really troubling.

This is exactly the kind of confusion I was hoping to avoid! As a newcomer to this community, I've been reading through all these responses and now I'm more uncertain than ever. @Rick B, your documentation showing withholding calculated AFTER Medicare deductions directly contradicts what multiple other members have experienced. @Dana Mulvany, the possibility that SSA's own online system has an implementation error is deeply troubling - how can we trust any of their automated processes if they can't get basic calculations right? I think what's most frustrating is that this should be a straightforward, standardized federal procedure, but clearly there's either systemic confusion within SSA or different systems are handling calculations differently. Has anyone tried reaching out to their local SSA office specifically to ask them to show the calculation order using actual numbers? I'm wondering if we need to escalate this discrepancy to someone higher up in the SSA hierarchy, because having people get different withholding calculations based on which system they use could create serious tax problems down the line. For now, I think I'll have to start with a conservative approach and monitor my statements very carefully once withholding begins. This thread has been incredibly valuable for showing just how inconsistent the information is - thank you all for sharing your real experiences!

This is really troubling to see such conflicting information! As a newcomer to Social Security, I was feeling confident after reading all the earlier responses saying withholding is calculated on the gross amount before Medicare deductions. But now @Rick B and @Dana Mulvany are reporting the complete opposite based on actual SSA documentation and experience with the online system. @Rick B, would it be possible for you to share more specifics about those SSA letters? Were they official benefit calculation statements or policy explanation documents? The calculation method you described withholding on (the net amount after Medicare would result) in significantly less tax being withheld, which could leave people owing money at tax time. @Dana Mulvany, your point about this potentially being an implementation error with the online system is very concerning. If SSA s own'automated system is calculating withholding incorrectly, that s a'major issue affecting everyone who uses it. I think this discrepancy needs to be reported to SSA for clarification. In the meantime, I m going'to be very cautious about setting up withholding until we can get a definitive answer from an official source. Has anyone tried contacting SSA s national'customer service line to get clarification on this specific calculation order? This level of confusion about a basic tax procedure is really unacceptable for a federal agency.

This is exactly the kind of systematic approach we need! As a newcomer who's been overwhelmed by all the conflicting information, your suggestion to document everything and monitor statements carefully makes perfect sense. The fact that we have people reporting completely opposite calculation methods based on actual SSA correspondence is deeply troubling. I'm particularly concerned about @Dana Mulvany s'point that this might be a recent implementation error with the online system. If SSA rolled out an automated withholding tool that s'calculating incorrectly, that could affect thousands of people who are trusting the system to handle their taxes properly. Your idea about contacting the Office of the Inspector General is really smart - this level of inconsistency in a federal tax procedure definitely seems like something that warrants official investigation. I m'going to start documenting my own withholding setup process from the beginning and will definitely report any discrepancies I find. For anyone else reading this who s'about to set up withholding, I think starting with a higher percentage as a safety buffer is wise until we can get definitive clarification on how these calculations actually work. Thank you for laying out such a clear action plan - it s'exactly what this confusing situation needed!