Publication 963 (Rev. October 1997) - Uncle Fed's Tax*Board

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Commonly Asked Questions SSA 21. My employees are paying into the State Teachers’ Retirement System and some have enough Social Security credits from a former job, will they receive full benefits from both? The Windfall Elimination Provision may result in reduced Social Security benefits. Additionally, spouses’ benefits may be reduced by the Government Pension Offset (GPO) formula. NOTES STATE If a person will receive a noncovered pension from a public retirement system such as a State Teachers’ Retirement System pension, and the person has enough Social Security credits to be eligible for retirement or disability benefits, a special formula may be used to determine the benefit amounts (producing lower Social Security benefits). The special formula affects workers who reach age 62 or became disabled after 1985 and became eligible after 1985 for a monthly pension based in whole or in part on work not covered by Social Security. A person is considered eligible to receive a pension if the requirements of the pension are met, even if the person continues to work. 22. The union for our employees wants us to begin withholding Medicare Hospital Insurance (HI) for all employees regardless of hire date. They are asking us to bargain on this. Can we make an agreement with them and begin withholding Medicare for everyone? If the employees have been in continuous employment with the employer since March 31, 1986, a Section 2l8 Agreement for Medicare HI-only coverage must beexecutedBEFORE you begin withholding Medicare. Bargaining with the union doesn’t change this requirement. If there is no HI-only Section 2l8 Agreement in effect, SSA will remove the credits from the employees’ earnings records even though they have paid taxes. Then the tax paid will have been paid in error. Contact your State Social Security Administrator to prepare an HI-only Section 218 Agreement modification. 23. I was told that we have to withhold Medicare regardless of Social Security coverage or noncoverage. Is this true? SSA Yes, for employees hired after March 31, 1986. IRS 24. How do I get a refund if I paid FICA in error? An employer may report an adjustment or file a claim for both the employee and employer share of the over reported FICA. An adjustment may be reported on Form 941 (Employer’s Quarterly Federal Tax Return) interest free or a claim can be filed using Form 843 (Claim for Refund and Request for Abatement). An employer must file Form 941c (Supporting Statement to Correct Information) or an equivalent supporting statement with either form (941/843). Also, note that the employer will need to prepare and provide Forms W-2c (Statement of Corrected Income and Tax Amounts) and W-3c (Transmittal of Corrected Income and Tax Statements) where appropriate (see the instructions for these forms). Federal-State Reference Guide (<strong>1997</strong> Edition) 2-7
Commonly Asked Questions NOTES 2-8 Federal-State Reference Guide (<strong>1997</strong> Edition)
Page 1 and 2: FEDERAL-STATE REFERENCE GUIDE Socia
Page 3 and 4: 4. Social Security Coverage Social
Page 5 and 6: 10. Public Employers State Governme
Page 8 and 9: Preface Objectives of this book Th
Page 10 and 11: Introduction Introduction Social Se
Page 12 and 13: Introduction Who Is Responsible for
Page 14 and 15: 2 Frequently Asked Questions
Page 16 and 17: Commonly Asked Questions Questions
Page 18 and 19: Commonly Asked Questions 10. Where
Page 22 and 23: Determining Worker Status 3
Page 24 and 25: Determining Worker Status Introduct
Page 26 and 27: Determining Worker Status The gover
Page 28 and 29: Determining Worker Status The deter
Page 30 and 31: Determining Worker Status Audits co
Page 32 and 33: Determining Worker Status COMMON LA
Page 34 and 35: Determining Worker Status Presence
Page 36 and 37: Determining Worker Status ♦ ♦
Page 38 and 39: Determining Worker Status In practi
Page 40 and 41: Determining Worker Status If statut
Page 42 and 43: Determining Worker Status FORM SS-8
Page 44 and 45: Determining Worker Status Penalty R
Page 46 and 47: Social Security Coverage 4
Page 48 and 49: Social Security Coverage Social Sec
Page 50 and 51: Social Security Coverage Note NOTES
Page 52 and 53: Social Security Coverage Chronology
Page 54 and 55: Social Security Coverage The Social
Page 56 and 57: Social Security Coverage Note: Serv
Page 58 and 59: Social Security Coverage Positions
Page 60 and 61: Social Security Coverage Questions
Page 62 and 63: 5 Medicare/Hospital Insurance Cover
Page 64 and 65: Medicare/Hospital Insurance Medicar
Page 66 and 67: Medicare/Hospital Insurance Employe
Page 68 and 69: Medicare/Hospital Insurance IRS 2.
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Public Retirement Systems 6
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Public Retirement Systems Definitio
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Public Retirement Systems meet this
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Public Retirement Systems participa
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Public Retirement Systems Individua
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Public Retirement Systems IRS 3. Wh
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7 The Role of the State Social Secu
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The Role Of The State Social Securi
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The Social Security Administration
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The Internal Revenue Service (IRS)
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The Internal Revenue Service Overvi
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The Internal Revenue Service Region
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The Internal Revenue Service 2. Wha
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Public Employers NOTES Local govern
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Public Employers NOTES Local Govern
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Public Employers NOTES Example: A
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Public Employers NOTES group-term l
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Public Employers NOTES 2. the emplo
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Public Employers NOTES Advance Earn
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Public Employers NOTES Electronic D
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Public Employers NOTES Wage Reporti
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Public Employers NOTES How SSA Proc
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Public Employers NOTES Paper Form W
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Public Employers NOTES Questions 1.
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Social Security and Medicare Benefi
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Publications, Forms and Other Resou
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Publications, Forms and Other Resou
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Glossary 13
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Glossary of Terms Absolute Coverage
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Government Pension Offset The gover
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Social Security Administration (SSA
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Appendix Internal Revenue Service R
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Appendix United States Circuit Cour
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Appendix Internal Revenue Service D
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Appendix (5) Such agreement shall,
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Appendix (C) For the purposes of th
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Appendix (B) such retirement system
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Revenue Ruling 86-88 Revenue Ruling
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Revenue Ruling 86-88 Q7. An employe
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Revenue Ruling 86-88 Q16. Will all
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Appendix Q5. In November 1982, an i
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Appendix (2) Periods of more than 3
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Appendix (4) Credited service for p
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Publication 963 (Rev. October 1997) - Uncle Fed's Tax*Board

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