|Step 1||Determine whether the individual elected to make any changes to cafeteria plan deductions, given the pandemic-related IRS flexibilities. |
Develop changes according to Section D.1 of this EM.
Example: Some employers allowed employees to add or change their health coverage, or make changes to their flexible spending account (FSA) allotments.
|Step 2||For wages paid from September 1, 2020 through December 31, 2020, when using pay slips that contain FICA tax information and list cafeteria plan deductions:|
Determine whether BOTH Social Security (6.2%) and Medicare (1.45%) taxes were deducted. The Social Security tax may appear on wage evidence as OASDI, FICA, Social Security, etc. Medicare taxes are usually accounted for separately, and may appear as “FICA Med” or “Medicare.”
If BOTH taxes continue to be deducted during the September through December 2020 period, follow normal policy in SI 00820.102 and SI 00820.130 to calculate cafeteria plan deductions and document wage evidence. Even if plan changes occurred due to COVID, the worksheet in SI 00820.102G will still calculate the countable wage as long as both FICA taxes continue to be deducted.
If the Social Security OASDI portion of the FICA tax is not being withheld and only Medicare tax is deducted,
Proceed to step 3.
|Step 3||Use the modified cafeteria plan deduction worksheet attached below to calculate countable wages for any pay slip showing zero Social Security tax deductions. |
IMPORTANT: The modified worksheet includes different figures for the tax amounts and multiplier. It is only to be used for wages affected by the September through December 2020 payroll tax holiday. Do not use the modified worksheet to calculate unaffected wages, (i.e., if someone’s employer has decided not to participate in the OASDI FICA deferral, follow normal policy in SI 00820.102 and SI 00820.130).
Post the countable wage amounts and deductions in the SSI Monthly Wage Verification system or to the applicable Wages page in the SSI Claims system, document wage evidence according to SI 00820.130, and issue a wage report receipt.
If you are not able to calculate countable wages using the modified worksheet,
Proceed to step 4.
|Step 4||Contact the employer to verify cafeteria plan deductions by phone or via the SSA-L4201. Note: Existing cafeteria plan precedents may no longer be accurate due to COVID-related plan changes. See instructions in SI 00820.102D for developing and updating precedents.
If employer contact is successful, document the file and retain associated evidence.
If employer contact is not successful, Proceed to step 5.
|Step 5||Accept the individual’s allegation on a signed person statement or DROC and assess, calculate, and post cafeteria plan deductions. Record your determination on the file documentation notes section of the Wages page or on DROC.|