What amount can Sebastian claim as a credit against his income tax after two employers withheld Social Security tax from his wages?

Sebastian can claim a credit against his income tax based on the amount of Social Security tax that has been withheld from his wages during the year. The correct amount that he is eligible to claim is $2,452, reflecting the total amount of Social Security tax that was withheld.

This amount is derived from the Social Security tax rate and the maximum taxable wages for that particular tax year. For 2023, the Social Security tax rate is 6.2% for employees, applied to wages up to a certain limit. Therefore, if Sebastian's income from both employers leads to a combined withholding that totals $2,452, he can claim this as a credit.

Understanding the mechanics of tax credits is vital. Tax credits reduce the total tax liability dollar-for-dollar, meaning that claiming the Social Security tax withheld directly decreases the amount of tax that he owes. This is different from deductions, which reduce taxable income but do not provide a direct reduction in tax owed.

Choosing this specific credit amount aligns with the understanding of the withholding and the limits set by the Social Security tax system, emphasizing the importance of recognizing tax credits that appear in the broader discussion of payroll taxes and individual tax filings.