Agenda - Council - 03/11/2014 - Laserfiche WebLink

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QUICK REFERENCE GUIDE FOR PUBLIC EMPLOYERS when it is credited or set apart to a person without any substantial limitation or restriction. Never use Form 1099-MISC to report compensation or reimbursements to employees. Information reporting is discussed in greater detail in Section 8 and the Instructions for Form 1099-MISC. 2. SOCIAL SECURITY AND MEDICARE COVERAGE Public employers need to be aware of the rules that govern social security and Medicare (FICA) coverage for their employees. Public employees fall into three different categories with respect to social security: (1) Subject to social security tax withholding through mandatory coverage, (2) Subject to social security through a Section 218 Agreement, or (3) Exempt from mandatory social security because they are covered by a public retirement system (also called a "FICA replacement plan"). These employees may or may not also be covered optionally for social security under a Section 218 Agreement. In many cases, several issues must be considered to determine the correct social security and Medicare status of an individual worker. A Section 218 Agreement between the Social Security Administration and a state's Social Security Administrator provides coverage for a group of state or local government employees. To determine the coverage that applies in a given situation, it is first necessary to determine whether a Section 218 Agreement covers services performed by the worker. If the Section 218 Agreement includes the position, any employee holding that position is covered under the Agreement, regardless of other factors. See the Key Dates section, later, for more information about the history and application of Section 218. If you are not sure whether a worker's position is covered, or have any questions about your Section 218 Agreement, please call your State Social Security Administrator. A list of state administrators is available at www.ncsssa.org. If a position is not covered by a Section 218 Agreement, you need to establish the date the worker in question was hired in order to determine the social security coverage for that worker. This is the date the worker began his/her current employment. If a worker was terminated and re -hired, the re -hire date is the date you use to determine whether coverage applies. For any period after July 1, 1991, any employees who are not participating in a qualifying retirement system made available through their employer MUST be covered by social security and Medicare (although certain services may be excluded from social security). If the position is covered for social security, either by a Section 218 Agreement or under mandatory coverage, the worker in that position is subject to social security tax, and the employer is responsible for contributing an additional share of the tax. 4