A Chief Counsel Memorandum released in March 2011 addresses the obligations of a federal agency, branch, or department to pay social security tax for wages paid to an employee covered by social security who also receives wages from another federal agency, and whose total wages exceed the maximum wage base for a given year. The maximum wage base for social security is adjusted annually. For more information, see Contribution and Benefit Base at SSA.gov. There is no wage base limitation on the Medicare tax. The guidance indicates that for purposes of the maximum wage base exception provided by section 3121(a)(1), the U.S. government is considered one employer. As a result, all federal employers should consider social security wages paid by another federal employer in determining whether an employee has received wages equal to the maximum wage base. However, federal employers are not required to coordinate activity with each other to ensure that the agencies together do not pay social security tax on amounts that exceed the maximum wage base. The employee can recover the excess employee social security tax on his or her income tax return through the special refund of over withheld social security tax provided by section 6413(c)(2)(A). For more information, see Tax Topic 608, Excess Social Security and RRTA Tax Withheld. The federal agency is not required to claim a refund or make an adjustment with respect to the excess social security tax paid as a result of the employee being employed by two agencies. If the federal agency decides to claim a refund or make an adjustment, it files Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return, and follows normal procedures for claiming a refund or making an adjustment of social security tax as described in the instructions for Form 941-X. The federal agency cannot claim a refund of only the employer portion of social security tax but must go through the normal refund or adjustment procedures that apply for social security tax. The memo also addressed situations in which a federal agency uses two shared service centers to pay wages. For more information, see the Memorandum (ILM 201125015)PDF.