Social security/medicare tax with W-2 income + active S corp losses

[maizefolk]

Let's say I'm regular W-2 employee,* which is where I earn most of my income for the year. I own part of two LLCs, one of which earns a profit and one of which losses money over the course of the year.

Case 1: My share of corp #1's profit is greater than my share of corp #2's loss. My understanding is the profits of corp #1 can be offset by the losses of corp #2, reducing the amount I owe in both regular income tax and self employment taxes (SS+medicare) on income from corp #1.

Case 2: My share of corp #1's profit is less than my share of corp #2's loss. After subtracting all of corp #1's profits, the remaining losses of corp #2 can be used to offset my W-2 income,** reducing my regular income tax owed.

So here's the part I haven't been able to figure out at all (maybe I just don't know the right google terms). In Case 2, where active losses from an LLC are being used to offset my W-2 income, does that also reduce the amount I owe in social security and medicare? Or does that part only work when both the losses and the profits are from "self employment" income?

Or am I just really confused about this whole situation? <-- probably the most likely explanation.

*Conveniently, this is true.
**Assuming I'm an active, rather than passive, participant in corp #2.

[BlueLesPaul]

I have actually never dealt with a Net Operating Loss (NOL), but assuming you satisfy the at-risk rule, my understanding is that it would treated as a deduction and therefore, you would not get a return of your SS/Medicare withheld as an employee. I also believe that a short-term capital loss or a long-term capital loss that is treated as ordinary loss would have the same result as an NOL vis a vis SS/Medicare for an employee.  Please note that NOL has its own calculation, which is described here. https://www.aicpastore.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2014/Tax/Net-Operating-Losses.jsp

The only instance that I am aware that you would have SS returned is if you worked 2+ jobs and your income was in excess of the SS cap.

[maizefolk]

Thanks BlueLesPaul. That's what I figured was likely the case as, like you, I've basically never heard of people getting a refund on SS, but I had also managed to construct a logical structure where it was silly that losses could cancel out social security when applied to some other sources of income (self employment) but not others (W-2).