The following is an example of an underpayment with a SMI premium involved.
A, a nonresident alien, is entitled to a RIB of $459.00 a month. A medical insurance
premium of $24.80. He receives monthly checks of $365.20 ($434.00 (amount payable
after SMI withholding) less $68.80 tax). In 6/88, A dies and his benefit check dated
6/3/88 is returned uncashed. His widow, a nonresident alien, requests payment.
The amount of the underpayment payable to the widow is $365.20—the amount of the returned
check. A's MBR is corrected to show tax of $3.70 withheld for the medical insurance
premium for 5/88. The balance of $65.10 ($68.80 less $3.70) is deleted from the MBR
and PHUS records. This amount is posted as tax on the underpayment.
NOTE: If the widow had been a U.S. citizen, she would have received $434.00, the amount
payable to A before tax withholding.