I overpaid Social Security taxes in 2020 to an employee who made 150,000 in 2020. I did not take into account the 137,000 limit on wages subject to SS withholding and paid based oin the 150,000.

So, i need to know what should I enter in Boxes 3 and 4 of the W2? If I enter 137,700 in Box 3 (which would be the correct amount if I HAD respected the 137.000 limit), it will not actually reflect that -although by mistake- I considered 150,000 as his 2020 wages.

Also, in Box 4, should I enter what I actually withheld from the employee (which was based on 150,000 instead of 137,000) or should I enter the amount corresponding to 137,000 (which is, of course, less than what I actually withheld).

I am afraid that if I fill out the W2 based on what I SHOULD HAVE WITHHELD, then when I apply for a refund of the excess, the IRS or SSA with look at the W2 and the numbers will not match.

For the W-2, you need to enter the max amount as specified in the instructions and the capped amount of $137K. Also enter the amount withheld based on $137K.

Then amend the employer tax returns (Forms 940/941/944) to correct the over-payment of Social Security taxes, then separately refund to the employee what you over-withheld.