No Fica

[JON]

on a W-2??? Client comes in we run through the information and I did not even notice. During the year he changed jobs to a religious not for profit university. The W-2 shows wages for box 1 and Medi wages box 5, but no social security wages box 3. I believe he is in administration??? What exemption from social security taxes does they/he have?

Thanks...

[taxxcpa]

Church employees

I'm not up to date on it, but I used to have a client who worked for a church that had elected NOT to have SS deducted. That church later elected to get back into the SS system.

I believe churches are allowed to make that election. It is probably discussed in The Tax Book.

[taxmandan]

I'm not up to date on it, but I used to have a client who worked for a church that had elected NOT to have SS deducted. That church later elected to get back into the SS system.

I believe churches are allowed to make that election. It is probably discussed in The Tax Book.

TTB page 5-4, they can be excluded if they are in the ministry or take a vow of poverty and are opposed to accepting SSA benefits.

[JON]

No vows

everything including MEDI is witheld. The only thing not withheld is social security.

He started working there in June and was over the taxable wages for social security at his previous job, but that should not make any difference....

He is an attorney, not a minister.

Help...

[travis bickle]

From what you have said

everything including MEDI is witheld. The only thing not withheld is social security.

He started working there in June and was over the taxable wages for social security at his previous job, but that should not make any difference....

He is an attorney, not a minister.

Help...

it merely seems that the educational institution (his employer) has opted out of the SS system.

V E R Y common for educational institutions here, and the employee position does not make a whit of difference (e.g., administrator, teacher, cafeteria worker, etc), all are treated the same. The employer most often has them set up with a different retirement plan.

[geekgirldany]

Agree with Travis. I have several teachers that work at the high school here and they can elect not to participate in social security and instead contribute to a retirement plan. So I am sure that is what is happening in on your client's w-2.

[JON]

Thanks

guys - this seems like a great thing for him. He is in his 60s and paid in at the max for years. I have done University of MN progessors and they all have social security withheld. I guess this is the first time I have had a prifit not-for-profit University W-2. I assumed they knew what they were doing. I was surprised.

[Burke]

I think the key here is in your OP. You said "religious" not-for-profit university? I do lots of teachers, professors, etc and I have never had one where SS was opted-outable (new word). Some are public schools, some are private. I thought the only time it was excludable was for a religious institution, although railroad employees also have their own system.
And Congress, of course.

[Lion]

Teachers

In CT, public teachers hired a long time ago (my hubby, for instance) paid no SS nor Medicare on their teaching wages but contributed to a state pension. CT teachers hired more recently pay into Medicare only but not SS and still contribute to their state pension. Other states have other systems in place.

[Gary2]

In MA, it's standard for state and local employees to participate in the state retirement program, not Social Security. Box 16 amounts exceed Box 1 amounts, since the state retirement contributions are only partially deductible on the state return, and you need to remember to manually include that amount on the return.

[ToledoEd]

In Ohio, the state employees and county employees are covered by the Ohio Public Employees Retitrement System, that predates Social Security and do not have FICA withheld, although the the new hires are covered by Medicare anyway. Same thing for Ohio Public school teachers, they are covered by the State Teachers Retirment System that also predates Social Security also. I have not heard of a private school that does not do SS withholding on anyone other than ministers and similar positions.

I had to explain that to our RAL bank one year as they had decided that anyone without SS withholding would not qualify for a RAL. Our practice does quite a few deputies and many of them liked the RALS, most got approved after they reviewed the history of those clients.

[FEDUKE404]

Someone please explain

I more or less understand the underlying issues where some churches, schools, and the like can opt out of participating in Soc Sec. Also I've frequently seen W2s for college kids where there is no FICA/Med withheld on campus jobs.

What intrigues me here is the original post about Soc Sec (FICA) not being withheld, but Medicare was.

One would think those two would either both be present, or neither be present. What am I missing??

Otherwise, you could have the scenario where a person 65 YOA would receive Medicare benefits (and I guess make the monthly payments in a strange way?) while not receiving any Social Security payments??

(Or maybe I just need another cup of morning coffee.....)

FE

[ToledoEd]

I believe that somewhere in the late 80's or early 90's there was legislation passed that mandated all working people to pay into the Medicare system, and also seperated the wage cut offs for Medicare and SS.

I have retirees that are receiving Ohio Public Employee Retirement (OPERS) pensions that have Medicare offsets on their forms.

[Burke]

One would think those two would either both be present, or neither be present. What am I missing??Otherwise, you could have the scenario where a person 65 YOA would receive Medicare benefits (and I guess make the monthly payments in a strange way?) while not receiving any Social Security payments??

This could be the case for any US citizen who did not work long enough under the SS system to qualify for retirement beneftis. However, they are entitled to Medicare at age 65, regardless. They would have to pay their own premiums. This would apply to persons who have lived overseas most of their working lives, for instance. I have a relative in this position.

[Davc]

He is an attorney, not a minister.

Are they Satan worshipers?