9. Adjustments on Form 943 If there is a discrepancy between the calculation of tax and thetax liability reported on Form 943, you will need to make anadjustment. There are two types of adjustments: current yearadjustments and prior year adjustments. See the instructions for Form943 for more information on how to report these adjustments. Current Year Adjustments In certain cases, amounts reported as social security and Medicaretaxes on lines 3 and 5 of Form 943 must be adjusted to arrive at yourcorrect tax liability. The most common situation involves differencesin cents totals due to rounding. Other situations when current yearadjustments may be necessary include third-party sick pay and theuncollected employee share of tax on tips. See Circular E for moreinformation on these adjustments. If you withhold an incorrect amount of income tax from an employee,you may adjust the amount withheld in later pay periods during thesame year to compensate for the error. Prior Year Adjustments Generally, you can correct social security and Medicare errors onprior year Forms 943 by making an adjustment on the Form 943 for theyear during which the error is discovered. The adjustment increases ordecreases your tax liability for the year in which it is reported (theyear the error is discovered) and is interest free. The netadjustments reported on Form 943 may include any number of correctionsfor one or more previous years, including both overpayments andunderpayments. You are required to provide background information andcertifications supporting prior year adjustments. File with Form 943 aForm 941c, Supporting Statement To Correct Information, orattach a statement that shows all of the following: What the error was, The year in which each error was made and the amount of eacherror, The date you found each error, That you repaid the employee tax or received from eachaffected employee written consent to this refund or credit, if theentry corrects an overcollection, and If the entry corrects social security and Medicare taxesovercollected in an earlier year, that you received from the employeea written statement that he or she will not claim a refund or creditfor the amount. Do not file Form 941c or the written statement separately. The IRS will not be able to process your adjustments without thissupporting information. See the instructions for Form 941c for moreinformation. Income tax withholding adjustments.You cannot adjust the amount reported as income tax withheld for aprior year return, even if you withheld the wrong amount. However, youmay adjust prior year income tax withholding to correct anadministrative error. An administrative error occurs ifthe amount you entered on Form 943 is not the amount you actuallywithheld. Examples include mathematical or transposition errors. Inthese cases, you should adjust the return to show the amount actuallywithheld. The administrative error adjustment corrects only the amountreported on Form 943 to agree with the actual amount withheld fromwages in that year. You may also need to correct Forms W-2 for the prior year if theydo not show the actual withholding by filing Form W-2c,Corrected Wage and Tax Statement, and Form W-3c,Transmittal of Corrected Wage and Tax Statements. Social security and Medicare tax adjustments.Correct prior year social security and Medicare tax errors bymaking an adjustment on line 8 of Form 943 for the year during whichthe error was discovered. If you withheld no tax or less than the correct amount, you maycorrect the mistake by withholding the tax from a later payment to thesame employee. If you withheld employee tax when no tax is due or if you withheldmore than the correct amount, you should repay the employee. Filing a claim for overreported prior year liabilities.If you discover an error on a prior year return resulting in a taxoverpayment, you may file Form 843, Claim for Refund andRequest for Abatement, for a refund. This form also can be used torequest an abatement of an overassessment of employment taxes,interest, and/or penalties. You must file Form 941c, or an equivalentstatement, with Form 843. See the separate Instructions for Form843. Note:For purposes of filing Form 843, a timely filed Form 943 isconsidered to be filed on April 15 of the year after the close of thetax year. Generally, a claim may be filed within 3 years from thatdate. Refunding amounts incorrectly withheld from employees.If you withheld more than the right amount of income, socialsecurity, or Medicare taxes from wages paid, give the employee theexcess. Any excess income tax withholding must be reimbursed to theemployee prior to the end of the calendar year. Keep in your recordsthe employee's written receipt showing the date and amount of therepayment. If you do not have a receipt, you must report and pay eachexcess amount when you file Form 943 for the year in which youwithheld too much tax. Filing corrections to Form W-2 and W-3 statements.When adjustments are made to correct social security and Medicaretaxes because of a change in the wage totals reported for a previousyear, you also may need to file Forms W-2c and Form W-3c.