Overwithholding

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DEFINITION of 'Overwithholding'

A generic term referring to an excess amount of tax being withheld for an employee or retirement plan participant throughout the year. Overwithholding can apply to both income and Social Security taxes. Any amount of overwithholding is sent back as a refund to the taxpayer after he or she has filed a return.

BREAKING DOWN 'Overwithholding'

Overwithholding is also known as excess withholding. This commonly occurs when there is an overexpectation of your yearly income, which could be caused by large bonuses or above average lump sum payments. Overwithholding of Social Security benefits is refunded back to the taxpayer in the form of a refundable tax credit.

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RELATED FAQS
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    In general, the Social Security Administration, or SSA, does not encourage citizens to change their Social Security numbers, ... Read Full Answer >>
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    Your spousal Social Security benefits may be taxable, depending on your total household income for the year. About one-third ... Read Full Answer >>
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    Spousal Social Security benefits are retroactive. These benefits are quite complicated, and anyone in this type of situation ... Read Full Answer >>
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    Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Transfer Payments For ... Read Full Answer >>
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