Social Security and Medicare Withholdings on County Salaries: Changes Effective January 1, 2011 University of Georgia CAES Business Office 215 Conner Hall Athens, GA

Changes Effective January 1, 2011 UGA Payroll Department: – will no longer withhold Social Security and Medicare from county portion of UGA Cooperative Extension employee salaries. – will no longer report Social Security and Medicare employee withholdings or employer contributions to the IRS for the county portion of UGA Cooperative Extension employee salaries.

CAES Business Office: – will no longer bill counties for reimbursement of the employer portion of Social Security and Medicare Monthly TRS Billing Statements: – Monthly billing for Teachers Retirement (TRS) employee and employer contributions will continue and will be unaffected by changes in Social Security and Medicare withholdings Changes Effective January 1, 2011

County cooperating boards: – must begin withholding Social Security and Medicare taxes from UGA Cooperative Extension employees’ county salaries – must begin reporting employee county salary withholdings and employer contributions of Social Security and Medicare to the IRS

Changes Effective January 1, 2011 These changes are to the process of reporting Social Security and Medicare to the IRS Counties will report employee withholdings and employer contributions directly to the IRS UGA will no longer withhold and report county salaries to the IRS on the counties’ behalf These changes do NOT affect UGA or County budgets

Changes Effective January 1, 2011 These changes do NOT affect employees on a UGA/county contract These changes will result in proper reporting of UGA Cooperative Extension employees’ county salaries to the IRS These changes will reduce incorrect salary reporting on W-2s at the end of each tax year

Changes Effective January 1, 2011 The following deductions should be taken from UGA Cooperative Extension employees’ county salaries beginning January 1, 2011: – Teachers Retirement (5.53% as of July 1, 2010)* – Federal Tax Withholdings – State Tax Withholdings – Social Security Tax Withholdings (6.2%)** – Medicare Tax Withholdings (1.45%) * Teachers Retirement is deducted only for benefits-eligible employees who are enrolled in TRS **Social Security Taxes should NOT be withheld from extension employees’ salaries who are members of the Federal Civil Service Retirement System (CSRS) or extension employees who are temporary/part-time. Membership in the CSRS or temporary/part-time status makes employees exempt from Social Security contributions.

Example A: Full-Time Employee John Doe has a county salary of $12,000/yr Prior to January 1, 2011, County deducts the following: – Gross county salary per month: $1, – Teachers Retirement (5.53%): $ – Federal Tax:$ * – State Tax:$ * – Net County check:$ * Tax withholding amounts are for example only

Example A: Full-Time Employee John Doe has a county salary of $12,000/yr Effective January 1, 2011, County deducts the following: – Gross county salary per month: $1, – Teachers Retirement (5.53%): $ – Federal Tax:$ * – State Tax:$ * – Social Security Tax (6.2%):$ – Medicare Tax (1.45%):$ – Net County check:$ * Tax withholding amounts are for example only

Example B: Employee with Federal Retirement (CSRS) Jane Smith has a county salary of $12,000/yr Prior to January 1, 2011, County deducts the following: – Gross county salary per month: $1, – Teachers Retirement (5.53%): $ – Federal Tax:$ * – State Tax:$ * – Net County check:$ * Tax withholding amounts are for example only

Example B: Employee with Federal Retirement (CSRS) Jane Smith has a county salary of $12,000/yr Effective January 1, 2011, County deducts the following: – Gross county salary per month: $1, – Teachers Retirement (5.53%): $ – Federal Tax:$ * – State Tax:$ * – Medicare Tax (1.45%):$ – Net County check:$ * Tax withholding amounts are for example only

Example C: Temporary/Part-Time Employee Bob Jones has a county salary of $6,000/yr working 50% time Prior to January 1, 2011, County deducts the following: – Gross county salary per month: $ – Federal Tax:$ 0.00 * – State Tax:$ 9.39 * – Net County check:$ * Tax withholding amounts are for example only

Example C: Temporary/Part-Time Employee Bob Jones has a county salary of $6,000/yr working 50% time Effective January 1, 2011, County deducts the following: – Gross county salary per month: $ – Federal Tax:$ 0.00 * – State Tax:$ 9.39 * – Medicare Tax (1.45%):$ 7.25 – Net County check:$ * Tax withholding amounts are for example only

Questions? Contact: Liz Bray 215 Conner Hall CAES Business Office