What does the 'Excess Federal Tax Withheld Amount' error on Form W-2 mean?

This error indicates that the federal income tax withheld for one or more employees appears unusually high compared to the wages reported. The SSA requires additional verification to ensure the withholding is accurate before processing the return.

Why this matters

The SSA closely monitors unusually high wage entries to prevent reporting mistakes and ensure accurate payroll tax calculations. Filings with excessive wages may be subject to review or delay if not properly verified.

What could cause this error?

• Data entry errors – Such as extra digits, misplaced decimals, or incorrect amount entries
   
• Misclassification of income – For example, bonuses or deferred comp mistakenly included as regular wages
   
• Duplicate reporting – The same employee's wages may have been reported more than once across forms or uploads
   

How to resolve it:

To move forward with your filing, you can:

• Edit the form: Review and update the wage details if the reported amount is incorrect.

OR

• Upload supporting documentation: If the amount is accurate and you're authorized to file, submit proof that validates the wage total.
   

Acceptable Proof of Documents

• CP575 for the business provided by the IRS

• Proof of federal tax deposited to the IRS

• Proof of business registration with the state

• Employee pay stub