TN 6 (07-90)
GN 05010.200 Overpayments Involving Alien Withholding Tax
These instructions apply to all overpayment cases involving alien taxation. Except as provided in GN 05010.200 - 05010.270, overpayment policies and procedures in GN 02200.000 also apply to overpayments for months in which alien tax was withheld.
1. Overpayment Amount
The overpayment amount is the total amount incorrectly paid, including any tax that was withheld. However, an overpaid beneficiary is asked to repay only the amount actually received (i.e., the amount paid after tax was withheld). This amount is withheld from current benefits or refunded to repay the overpayment. SSA waives collection of the portion of the overpayment withheld for tax purposes. (See GN 05010.220.)
2. Tax Withholding
Whether tax was withheld or how much was withheld is immaterial in computing an overpayment. However, the tax amount withheld is material in determining how much an overpaid beneficiary is asked to repay.
3. Administrative Adjustments
An administrative adjustment is made in some cases when an overpayment is recovered from current benefits paid to the beneficiary or another beneficiary entitled on the same account. This is done to ensure SSA does not pay more in benefits than it would have paid if action had been taken timely on the event causing the overpayment.
Generally, the amount adjusted administratively for each month is the difference between the monthly benefit credited (MBC) and the sum of (a) amount offset to recover overpayment, (b) amount actually paid to beneficiary and (c) tax amount based on amount actually paid to beneficiary. (See GN 05010.230.)