Identification Number:
RS 01901 TN 46
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Coverage and Exceptions
Type:POMS Transmittals
Program:Title II (RSI)
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part RS – Retirement and Survivors Insurance
Chapter 019 – Coverage and Exceptions
Subchapter 01 – Coverage and Exceptions
Transmittal No. 46, 09/30/2019

Audience

PSC: CA, CS, SCPS, TSA, TST;
OCO-OEIO: BA, BATE, CA, CA TE, CR, DE/FDE, DEC/FDEC, FCR, RDE/FRDE, RTA;
OCO-ODO: BA, CA, CATE, CR, CST, DE, DEC, DS, PETE, RDE;
OCO-OEO: BET, EOE, ERS, ERT, LERT, LSYSOPS, MSS, SYSOPS;
FO/TSC: CS, CSR, CTE, TCSR;

Originating Component

OISP

Effective Date

Upon Receipt

Background

This transmittal is a Quick Action Transmittal. These revisions do not change or introduce new policy or procedure. As a result of the Tribal Social Security Fairness Act effective September 20, 2018, Tribes can enter into a 218A agreement and elect to pay Federal Insurance Contributions Act (FICA). Any tribe that enters into such agreement will be added to Subsection E of RS 01901.700.

Summary of Changes

RS 01901.700 Services Performed by Members of Indian Tribal Councils

In subsection E, we are adding the following tribes:

  • After Kootenai Tribe of Idaho, in the column "Name of Tribe", add Little Traverse Bay Bands of Odawa Indians, Michigan and in the next column for "Effective Date of Coverage", add March 1, 2019; and

  • After the Zuni Tribe, for the "Name of Tribe" and the "Effective Date of Coverage" we are adding the following:

  • Barona Group of Capitan Grande Band of Missions Indians of the Barona Reservation, California, April 7, 2019

  • Confederated Tribes of the Siletz Indians, May 1, 2019

  • Alabama-Coushata Tribe of Texas, June 1, 2019

  • Spokane Tribe of Indians, July 1, 2019

  • Squaxin Island Tribe, August 1, 2019

  • Yankton Sioux Tribe of South Dakota, August 2, 2019

  • Stockbridge-Munsee Community, October 1, 2019

In Subsection G, we are removing the stand-alone bullet and the dashes in front of each reference.

RS 01901.700 Services Performed by Members of Indian Tribal Councils

CITATIONS:

Act as amended Sec 218A; Sec 210(a);
IRS Revenue Ruling 59-354; 25 USC 5123; 26 USC 501

A. Background

The Tribal Social Security Fairness Act of 2018, Public Law 115-243, became law on September 20, 2018. This new law amends the Social Security Act by creating Section 218A to allow voluntary Social Security coverage for federally recognized Indian Tribal council members. These tribes may also request retroactive coverage for past periods when the tribe paid FICA (Federal Insurance Contributions Act) taxes, but did not request a refund of those taxes from the Internal Revenue Service (IRS).

B. Definitions

1. Federally recognized Indian tribe

A federally recognized tribe is an American Indian or Alaska Native tribal entity that is recognized as having a government-to-government relationship with the United States, with the responsibilities, powers, limitations, and obligations attached to that designation, and is eligible for funding and services from the Bureau of Indian Affairs. The Bureau of Indian Affairs publishes and periodically updates a list of federally recognized Indian tribes in the Federal Register.

2. Indian Tribal Council

The governing body of a tribe or group of Native American Indians that provides advisory and/or program services to members of the tribe.

3. Indian tribal council members

Generally, the tribal council consists of elected tribal members who answer only to the members of the Indian tribe. However, clan mothers may appoint council members or members inherit their position. When council members receive a salary or stipend they are exercising governmental authority. No one controls or directs their actions.

4. Tribal business enterprises

Businesses owned and or controlled by an Indian tribal government. These entities include casinos, restaurants, medical clinics, housing authorities, gas stations, and a variety of other industries.

C. Social Security and Medicare Coverage for members of federally recognized tribes

1. General coverage rules

Based on IRS Revenue Ruling 59-354, payment for services of tribal council members in federally recognized Indian tribes does not constitute wages for tax purposes. Based on the same rationale as provided in Revenue Ruling 59-354, services performed by members of Indian tribal councils in their capacities as council members do not constitute employment under Section 210 of the Social Security Act, unless a tribal council has entered into an agreement for such coverage as explained below in B.2. Therefore, services performed by Indian tribal council members are not covered under Social Security and Medicare, unless a voluntary coverage agreement provides otherwise (as noted below in RS 01901.700.C.2).

Services performed by employees of tribal councils who are not tribal council members (e.g. administrative assistants, tax collectors, or justices of the peace), or by employees of the tribe, or by employees of tribal business enterprises are considered employment and are covered for Social Security. See RS 01901.710 for information on excluded tribal activity.

NOTE: We use earnings posted for members of Indian tribal councils for tax years 2005 and earlier in applicable benefit computations.

2. Voluntary coverage of tribal council positions of federally recognized tribes

The tribal council members obtain coverage through a formal written agreement between the tribe and SSA. Once SSA approves the request, every member of the tribal council receives coverage. The agreement applies to all current and future members in tribal council positions, and cannot be modified or terminated.

a. The effective date of coverage is either:

  • the first day of the month after the month the agreement was executed by both parties; or

  • a later date specified by the tribe.

b. Retroactive coverage

In addition to future coverage, a tribe may request retroactive coverage for periods predating the effective date of the agreement. SSA will provide retroactive coverage, at the tribe's request, for any specific period that the tribe specifies on the agreement, which corresponds to tribal council member services for which the tribe:

  • timely paid taxes in an amount equivalent to what would have been due under the Federal Insurance Contributions ACT (FICA) in good faith; and

  • any specific period for which the Internal Revenue Services (IRS) did not issue a refund of these taxes.

SSA will not provide retroactive coverage if it is unable to verify that the FICA taxes were paid, and that the tribe did not receive a refund.

NOTE: If SSA approves the request for retroactive coverage, the retroactive coverage applies to any current or former tribal council members who made FICA-equivalent payments during the approved period(s) of retroactivity.

D. Procedure for extending coverage

STEP

ACTION

1

A federally recognized tribe wishing to cover its tribal council positions contacts its Regional Office (RO) Tribal Coverage Specialist to formally request to enter into an agreement for coverage of its tribal council positions. For tribes whose territory spans more than one region, the tribe contacts the region in which its tribal headquarters is located.

2

The RO Specialist verifies that the tribe making the request for coverage is a federally recognized tribe by checking the Bureau of Indian Affairs (BIA) list of federally recognized Indian tribes .

3

The RO Specialist will complete the Section 218A agreement (Indian Tribal Council Coverage Agreement) based on discussions with the Tribe, and send two copies for their review and wet signature.

NOTE: An individual authorized to act on the tribe's behalf must sign the agreement. SSA presumes the individual identified in the BIA's tribal leader directory is authorized to do so absent compelling evidence that BIA's tribal leader directory is out of date. If the tribe intends to have a different individual execute the agreement, the tribe is required to provide any necessary documentation to verify the authority of the individual to act on behalf of the tribe.

STEP

ACTION

4

Once the RO Specialist receives the completed agreement, the Specialist reviews the agreement for completeness (i.e. missing or incomplete information, effective date of coverage, election or declination of retroactive coverage and, signed by an authorized representative).

NOTE: If the RO Specialist is unable to verify an individual's authority to sign the agreement or has any concerns regarding that authority, the RO Specialist will work with the Office of Program Law (OPL) in SSA's Central Office to verify the individual's authority to sign the agreement.

STEP

ACTION

5

The RO Specialist forwards the agreement to the delegated official in the region for signature. To execute the agreement, the delegated official will wet sign both copies of the agreement.

6

Once the agreement is executed, the RO Specialist will:

  • Fax a copy of the agreement to the Internal Revenue Service to (844) 201-8377.

  • Fax a copy to the Tribal Council, and mails one of the original signed copies to the Tribe, and

  • Update the required agency records and notifies the appropriate personnel.

7

The RO Specialist checks the agreement to see if the tribe requested retroactive coverage. If retroactive coverage is requested, the RO Specialist will:

• Ask the Tribe to identify the period(s) prior to the effective date of the agreement, where tribal council members paid FICA taxes and did not request a refund from the IRS.

• Verify that any individual council member who the tribal council had employed during the retroactive period made FICA payments during the retroactive period, by obtaining an Employer Query Report (ERQY) or, if not available, obtain a Detailed Earnings Report (DEQY).

  • Request proof of the earnings from the Tribe if the ERQY and DEQY show no covered earnings or additional information is necessary. Refer to RS 01403.005 for the requirements for evidence of wages.

  • Obtain a statement from the tribe stating that they did not request or receive a refund from the IRS for any portion of the retroactive period.

8

Once the RO Specialist determines if the tribal council is entitled to the requested retroactive coverage, the RO Specialist takes the following actions:
  • Forwards a determination letter to the delegated official in the region for signature and sends the letter to the Tribe.

  • The Specialist will update the required agency records to document the retroactivity, and inform the appropriate personnel.

E. List of federally recognized tribes with voluntary coverage

Name of Tribe

Effective Date of Coverage

Period(s) of Retroactive Coverage (if any)

Muckleshoot Indian Tribe

November 1, 2018

Klamath Tribe

January 1, 2019

Confederated Tribes of the Chehalis Reservation

January 1, 2019

Tulalip Tribes of Washington

January 1, 2019

Mashantucket Pequot Tribal Nation

February 1, 2019

Kootenai Tribe of Idaho February 1, 2019
Little Traverse Bay Bands of Odawa Indians, Michigan March 1, 2019
Nisqually Tribe April 1, 2019
Zuni Tribe April 1, 2019
Barona Group of Capitan Grande Band of Missions Indians of the Barona Reservation, California April 7, 2019
Confederated Tribes of the Siletz Indians May 1, 2019
Alabama-Coushata Tribe of Texas June 1, 2019
Spokane Tribe of Indians July 1, 2019
Squaxin Island Tribe August 1, 2019
Yankton Sioux Tribe of South Dakota August 2, 2019
Stockbridge-Munsee Community October 1, 2019

F. Coverage rules for members of non-federally recognized tribes

All services performed by employees, including services performed by tribal council members, of a non-federally recognized tribe are covered employment for Social Security and Medicare purposes.

Tribes that are not federally recognized may apply to the IRS for consideration to be a tax-exempt organization. If the IRS approves a tribe’s application for consideration to be a tax-exempt organization, the service performed by all council members are covered. The Social Security coverage rules governing services performed for non-profit organizations beginning January 1, 1984 apply. See RS 01901.540 for the coverage rules for services performed for nonprofit organizations. Tribal employees can provide either a copy of their determination letter or IRS Form 990 ( Return of Organization Exempt from Income Tax ) to verify that their tribe is considered an exempt organization..

G. References


RS 01901 TN 46 - Coverage and Exceptions - 9/30/2019