Is there anyway to tell the online payroll system to stop withholding social security tax only?
1. Unfortunately, there is no (legal) way to stop withholding the Social Security tax. (The option for not withholding Social Security and Medicare is actually for special categories of employees such as clergy, and does not apply to your situation). All employers must withhold the tax up to the maximum limit each year for every employee. 2. You are correct about your personal part of the tax –when you file your form 1040 at the end of the year, you will get a refund for the personal portion. On the 2008 1040, it was line 65. There is no way to get the S corporation tax back. It is just a (deductible) expense to the corporation. All employers have this same problem.
