To notify agencies of the new Deduction Code 502 (Social Security/Medicare Deficiency) that will be used to recover Social Security and/or Medicare tax deficiencies.
Employees who incur a Social Security and/or Medicare tax deficiency.
Note: Employees who currently have a Social Security and/or Medicare tax deficiency and are repaying the deficiency under Deduction Code 500 or 501 will not be affected by this change.
An employee’s Social Security and/or Medicare tax deficiency can originate from an erroneous exemption from employment taxes (i.e. the employee’s FICA Status on the Job Data page is incorrect) and/or other reportable earnings are added to the employee’s taxable gross wages after the issuance of the final paycheck in a calendar year.
Currently, the biweekly amount to be recovered per pay period is manually calculated at a flat 3% of the employee’s gross earnings. The total tax deficiency amount is entered by OSC into the Goal Amount field and the amount to be recovered per pay period is entered into the Flat Amount field on the employee’s General Deduction Data page. When the Goal Amount is reached, the deduction is automatically stopped.
OSC will create the new deduction code with the calculation routine of “Percent of Total Gross.” This calculation method will ensure an accurate recovery amount of 3% of the employee’s gross earnings each pay period.
Agencies do not have update access to this new deduction code.
Questions regarding this bulletin may be directed to the Salary Determination mailbox.