Employee consent used by employer to claim FICA, RRTA refund

Employee consent to claim FICA, RRTA refund

The IRS today released an advance version of Rev. Proc. 2017-28, which provides guidance to employers on the requirements for employee consent used by an employer to support a claim for refund of overpaid taxes under the Federal Insurance Contributions Act (FICA) and the Railroad Retirement Tax Act (RRTA).

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Read Rev. Proc. 2017-28 [PDF 115 KB]

Initial guidance on employee consents was provided in IRS Notice 2015-15, which included a request for comments on a proposed revenue procedure included with the notice.Today’s Rev. Proc. 2017-28 substantially adopts the proposed revenue procedure with a few notable changes. First, a new requirement is added that all requests for consent must indicate that an employee cannot authorize the employer to claim a refund on the employee’s behalf for any overpaid Additional Medicare Tax. Second, although the time afforded to an employee (or former employee) to respond to a request for consent remains at 45 days, the revenue procedure shortens the time to respond to a second request for consent to 21 days. Third, the use of a truncated taxpayer identification number (TTIN) is now permitted if an employer prepares a consent for the employee to sign and prepopulates the employee’s TIN with the TTIN. Also discussed is guidance concerning what constitutes “reasonable efforts” if employee consent is not secured in order to permit the employer to claim a refund of the employer share of overpaid FICA or RRTA taxes.

The revenue procedure applies to employee consents requested on or after June 5, 2017 (but can be relied on for consents requested before that date).  

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