05-P-025 Unemployment Compensation Insurance, Social Security (OASDI) and Medicare Exemptions (Supersedes 04-P-023)
|DATE:||February 24, 2005|
|SUBJECT:||Unemployment Compensation Insurance, Social Security (OASDI) and Medicare Exemptions|
|CONTACT:||Sunni Zentner||(785) 296-7058||Sunni.Zentner@da.state.ks.us|
|SUMMARY:||Unemployment Compensation Insurance, Social Security (OASDI) and Medicare Exemptions|
Kansas' law exempts certain groups of employees from Unemployment Compensation Insurance (UCI). Likewise, the State's Section 218 Agreement with the Social Security Administration exempts others from Social Security (OASDI) and Medicare. This informational circular is being issued to clarify information previously issued and to assist agencies in properly establishing UCI, Social Security and Medicare tax coverage for employees.
Following is a list of exemptions from UCI. This list is not intended to be all-inclusive and addresses those exemptions most applicable to State of Kansas employees. The statutory reference is included:
Unemployment Compensation Insurance Exemptions (from K.S.A.):
- Students, who are enrolled and regularly attending classes, in the employ of a college or university (K.S.A. 44-703 (i)(4)(N)).
- Patients in the employ of a hospital licensed, certified or approved by the Secretary of Health and Environment (K.S.A. 44-703 (i)(4)(P)).
- Services performed as part of an employment work relief or work training program assisted or financed in whole or in part by any federal agency or an agency of the state or political subdivision, by an individual receiving such work relief or work training (K.S.A. 44-703 (i)(4)(L)). (Does not apply to Employee Under Public Service Careers or the Emergency Employment Act of 1971.)
- Ordained, commissioned or licensed ministers of a church in the exercise of their ministry or members of a religious order (who have taken a vow of poverty) in the exercise of duties required by such order (K.S.A. 44-703 (i)(4)(J)).
- Individuals (patients, etc.) in a facility that's purpose is providing rehabilitation or remunerative work, who are impaired by age, physical or mental deficiency, or injury, or who because of their impaired physical or mental capacity cannot be readily absorbed in the competitive labor market (K.S.A. 44-703 (i)(4)(K)(i)(ii)).
- Services performed in the employ of the United State Government (K.S.A. 44-703 (i)(4)(D)).
- Elected officials (K.S.A. 44-703 (i)(4)(A)(i)).
- Members of legislative bodies (K.S.A. 44-703 (i)(4)(A)(ii)).
- Members of the judiciary or of a state or political subdivision (K.S.A. 44-703 (i)(4)(A)(ii)).
- Members of the state national guard or air national guard (K.S.A. 44-703 (i)(4)(A)(iii)).
- Employees serving on a temporary basis in cases of fire, storm, snow, earthquake, flood, or similar emergency (K.S.A. 44-703 (i)(4)(A)(iv)).
- Employees in a position which, under or pursuant to the laws of this state, is designated as a major nontenured policymaking or advisory position or as a policymaking or advisory position the performance of the duties of which ordinarily does not require more than eight hours per week (K.S.A. 44-703 (i)(4)(A)(v)). (Note: Board member positions (for example, job code 010300) would be included in this group of employees.)
- Inmates in the employ of a custodial or correctional institution (K.S.A. 44-703 (i)(4)(M)).
If an employee is on more than one concurrent position, and at least one of those positions is subject to UCI, then the Employee Tax Data should be set to "subject". UCI tax will have to be calculated and paid on all wages for that employee including positions that are not normally subject to UCI, such as board member pay.
Agency personnel are responsible for ensuring that employees are exempted from UCI as appropriate. Exemptions from UCI are entered in SHARP under Employee Tax Data (path: 'Compensate Employees', 'Maintain Payroll Data (US)', 'Use') on the State Tax Data 2 page by clicking "on" the 'Exempt From SUT' checkbox.
Social Security (OASDI) and Medicare Exemptions (based on the State's current Section 218 Agreement):
- Students in the employ of a college or university who are regularly enrolled and attending classes
- Members of the Kansas Police & Firemen's Retirement (KP&F) at Kansas Bureau of Investigation (KBI) or Highway Patrol hired before 04/01/1986*
- Non-resident aliens in possession of an F-1 VISA
- Non-resident aliens in possession of a J-1 VISA
- Non-resident aliens in possession of an M-1 or Q-1 VISA
- National Guard employees on active duty
- Wages After Death - If a wage payment will be issued in the subsequent year after the year in which the person died, the wages are not subject to Social Security and Medicare under Sec. 209M of the Social Security Act
- Medicare covered employees - Members of Kansas Police & Fireman's Retirement at KBI and Highway Patrol hired on or after 04/01/1986 have mandatory Medicare coverage* (Choose "Medicare only" for the FICA Status field)
- Patients or inmates in the employ of a hospital, home, or penal institution
- Services by an individual who has taken a vow of poverty
*Any positions affiliated with KP&F after 04/29/1983 that were previously covered by OASDHI will continue to be covered by OASDHI (P.L. 98-21). These positions include University Police affiliated with KP&F in 1989 and Capitol Area Security Police and Motor Carrier Inspectors affiliated with KP&F in 2004.
As with UCI, agency personnel are responsible for ensuring that employees are exempted from Social Security (OASDI) and Medicare coverage as appropriate. Exemptions from Social Security and Medicare are entered under Job Data (path: 'Administer Workforce', 'Administer Workforce (GBL)', 'Use') on Payroll page. If the employee is exempt from both OASDI and Medicare, 'Exempt' should be chosen for the FICA Status field. If the employee is exempt only from OASDI, 'Medicare only' should be chosen.