Example 1: Tax Due on Benefits Paid Before
Effective Date of 202(t)(2) Determination
A was entitled to retirement insurance benefits (RIB) of $400.00 effective 2/95. In
9/95, SSA was advised that he left the U.S. on 3/10/95 and established residence in
Hungary. He was a Hungarian citizen and did not meet an exception to the alien nonpayment
provisions.
He was placed in SJ status (suspension for failure to meet an exception to the alien
nonpayment provisions) effective 10/95 (the seventh calendar month of his absence
from the U.S.). The MBR was annotated to show an AWSC of 8 and an Alien Retroactive
Withholding Amount (ARWA) of $102.00 for each month from 3/95 - 9/95.
In 6/99, as a result of the positive 202(t)(2) determination on the Hungarian social
insurance system, his case is reviewed. It is determined that, as a Hungarian citizen,
he meets an exception to the alien nonpayment provisions and is due monthly benefits
for the period from 1/96 to date. Action is taken as follows to:
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•
Compute the benefits due.
1/96-11/96 : $410.00 x 11 months = 12/96-11/97: 420.00 x 12 months = 12/97-11/98: 425.00 x 12 months = 12/98-6/99 : 430.00 x 7 months =
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$ 4,510.00 5,040.00 5,100.00 +
3,010.00 17,660.00
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•
Compute the unpaid tax liability.
$102.00 x 7 months =
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$714.00
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•
Withhold the amount of the unpaid tax liability from the benefits due.
Benefits due Unpaid tax liability Benefits due-after collection of tax
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$17,660.00 -
714.00 16,946.00
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•
Process the $16,946.00 (after withholding the 25.5 percent nonresident alien tax)
according to normal payment procedures.
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•
Annotate PHUS to show benefits of $714.00 withheld.
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•
Change the MBR to show an AWSC of 3 and an Alien Monthly Withholding Amount (AMWA)
of 000 for the months 3/95 - 9/95 and place a special message on the MBR to show:
"Per GN 05010.112, AWSC of 3 assigned for 3/95 - 9/95."
The notice to A advises him that $714.00 has been withheld to pay the tax that should
have been withheld for the payments made to him for 3/95 - 9/95.
Example 2: Overpayment Case and Tax Due
on Benefits Paid Before Effective Date of 202(t)(2) Determination
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A was entitled to RIB of $325.00 effective 2/89. In 9/93, SSA was advised that he
left the U.S. on 3/24/90 and established residence in Hungary. He was a Hungarian
citizen and did not meet an exception to the alien nonpayment provisions.
A was placed in SJ status (suspension for failure to meet an exception to the alien
nonpayment provisions) effective 10/90 (the seventh calendar month of his absence
from the U.S.). The MBR was annotated to show an AWSC of 8 and an ARWA of $49.50 for
3/90-11/90, $50.30 for 12/90 - 11/91, $51.00 for 12/91 - 11/92, and $51.80 for 12/92
- 8/93. He is overpaid $11,865.00 (the benefits he received for 10/90-8/93).
In 6/99, as a result of the positive 202(t)(2) determination on the Hungarian social
insurance system, his case is reviewed. It is determined that, as a Hungarian citizen,
he meets an exception to the alien nonpayment provisions and is entitled to monthly
benefits for the period from 1/96 to date. Action is taken as follows to:
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•
Compute the benefits due.
1/96-11/96 : $360.00 x 11 months = 12/96-11/97: 365.00 x 12 months = 12/97-11/98: 370.00 x 12 months = 12/98-6/99 : 375.00 x 7 months =
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$ 3,960.00 4,380.00 4,440.00 +
2,625.00 15,405.00
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•
Withhold the overpayment from the benefits due.
Benefits payable Overpayment Benefits due-after recovery of overpayment
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$15,405.00 -11,865.00 3,540.00
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•
Compute the unpaid tax liability.
$49.50 x 7 months =
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$346.50
|
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•
Withhold the amount of the unpaid tax liability from the benefits due.
Benefits due Unpaid tax liability Benefits due-after collection of tax
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$3,540.00 -
346.50 3,193.50
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•
Process the $3,193.50 (after withholding the 25.5 percent nonresident alien tax) according
to normal payment procedures.
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•
Annotate PHUS to show benefits of $12,211.50 ($11,865.00 overpayment plus $346.50
tax) withheld.
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•
Change the MBR to show an AWSC of 3 and an AMWA of 000 for the months 3/90 - 9/90
and place a special message on the MBR to show: "Per GN 05010.112, AWSC of 3 assigned for 3/90 - 9/90."
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•
Show an AWSC of 5 and ARWA of 000 for 10/90 - 8/93.
The notice to A advises him that $11,865.00 has been withheld to recover the overpayment
for 10/90 - 8/93, and that $346.50 has been withheld to pay the tax that should have
been withheld for the payments made to him for 3/90 - 9/90.
Example 3: Tax Due on Benefits Paid After
Effective Date of 202(t)(2) Determination
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A was entitled to RIB of $400.00 effective 2/96. In 12/98, SSA was advised that he
left the U.S. on 3/10/96 and established residence in Hungary. He was a Hungarian
citizen and did not meet an exception to the alien nonpayment provisions.
A was placed in SJ status (suspension for failure to meet an exception to the alien
nonpayment provisions) effective 10/96 (the seventh calendar month of his absence
from the U.S.). The MBR was annotated to show AWSCs of 8 and ARWAs of: $102.00 for
3/96 - 11/96, $104.60 for 12/96 - 11/97, and $107.10 for 12/97 - 11/98. A is notified
that he has been overpaid $10,760.00 he received for 10/96 - 11/98.
In 6/99, as a result of the positive 202(t)(2) determination on the Hungarian social
insurance system, his case is reviewed. It is determined that, as a Hungarian citizen,
he meets an exception to the alien nonpayment provisions since he left the U.S. Thus,
the benefits he was paid for 10/96 - 11/98 are not an overpayment although he has
an unpaid tax liability for the months 3/96 - 11/98. Action is taken as follows to:
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•
Delete any references to an overpayment for 10/96 - 11/98.
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Compute the benefits due.
12/98-6/99 : $430.00 x 7 months =
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$ 3,010.00
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Compute the unpaid tax liability.
3/96-11/96 : $102.00 x 9 months = 12/96-11/97: 104.60 x 12 months = 12/97-11/98: 107.10 x 12 months =
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$ 918.00 1,255.20 +1,285.20 3,458.40
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•
Determine when the unpaid tax liability will be collected from benefits due.
Unpaid tax liability Benefits due through 6/99 Remaining unpaid tax liability
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$3,458.40 -3,010.00 448.40
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Benefit for 7/99 Remaining unpaid tax liability - to be collected from 8/99 benefit
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430.00 18.40
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•
Advise A that the benefits due him for 12/98 - 7/99 and part of 8/99 are being used
to pay the nonresident alien tax of $3,458.40 that should have been withheld from
the benefits he received for 3/96 - 11/98.
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•
Review the file in the current operating month (COM) 7/99 and take manual action to
withhold that benefit to recover the unpaid tax liability.
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•
Review the file in COM 8/99 and take manual action to collect the remaining $18.40
unpaid tax liability. The resulting benefit due is processed under the normal payment
procedures.
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•
Annotate PHUS to show benefits of $3,458.40 withheld.
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•
Change the MBR to show an AWSC of 3 and an AMWA of 000 for the months 3/96 - 11/98
and place a special message on the MBR to show: "Per GN 05010.112, AWSC of 3 assigned for 3/96 - 11/98."
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•
Show an AWSC of 5 and an AMWA of 000 for the months 12/98 - 7/99.