TN 8 (05-95)
GN 05010.250 Reduction of Overpayments by Excess Benefits Withheld for Taxes
This section discusses the action taken on excess benefits withheld for taxes which come to SSA's attention at the time of, or after, the overpayment determination.
1. Excess Withheld in Closed Year
Excess benefits withheld for taxes in a closed year(s) cannot be used to reduce the amount an overpaid individual is asked to repay.
The individual must file with IRS for any refund due for a nonoverpayment month(s). See 3. below for refunds which appear to be due for an overpayment month(s) in a closed year(s).
2. Excess Withheld in Current Year
Excess benefits withheld for taxes in the current year but not for an overpayment month(s) are used to reduce the amount an overpaid individual is asked to repay if the refund otherwise due can be processed before the cut-off date for the annual statement for that year. The reduction is made at the time of the initial overpayment determination or later if it is noted an excess tax amount was withheld.
3. Excess Withheld in Overpayment Month(s)
A refund of excess benefits withheld for taxes which appears to be due for an overpayment month(s) in the current or a closed year is not due because the overpayment-underpayment computations take these amounts into consideration.
4. Excess Withheld From Other Beneficiary(ies)
Excess benefits withheld for taxes in the current year from other beneficiaries entitled on the same account are used to reduce title II overpayments under the same conditions as benefits due to other beneficiaries (see GN 02210.007 for information on adjustment of benefits due other than the overpaid individual).
Reduce the amount the overpaid beneficiary is asked to repay by the amount of the excess benefits withheld for taxes in a nonoverpayment month(s) in the current year.
Advise the beneficiary of the excess benefit amount, the reason the excess benefits were withheld for taxes, that the excess benefits have been used to reduce the amount he/she must pay and the reduced amount.