Sunday, July 11, 2010

Social Security tax for state employees?

I recently got a report for the history of my earnings in the mail from the Social Security administration and it lists no income for me in 2007 (towards social security). I was a state employee of Maryland that year so am I wondering do state and federal employees not pay social security tax? Am I entitled to anything from the state in the future? How/why does it work this way (assuming this is not a mistake)?





Additionally, since I am not going to continue working as a state employee does this mean those earnings will never count towards my final SS package?

Social Security tax for state employees?
It also might be that the information for 2007 is not yet updated. It can take the system quite a few months into the next year before information may be updated -- depending on when the information was sent to the SSA.





If you still think that it's a state employee vs. non-state employee issue, you can look into it further by following the information on this Social Security Administration web site:





http://www.socialsecurity.gov/pubs/10051...
Reply:If you don't pay into Social Security, then when you retire you will not get anything. If you qualify for State Aid, which if your working I don't think you will qualify. I know for a fact, My uncle didn't pay social securtiy as a federal employee, now his wife doesn't get anything on his SS#, only hers.
Reply:With some government entities, employees pay into a government pension plan rather than social security. Check with your HR people and ask them what your situation is.
Reply:Many state and local governments pay into a pension fund instead of SS. Your retirement will presumably come from the pension fund, but you will get no credits toward SS while working for there.
Reply:You are covered by a state retirement system. Your wages will be covered by Medicare so you should have Medicare wages but no Social Security wages. If you don't there is a problem that is beyond help from this forum.
Reply:Unfortunately, the answer is yes. Most state %26amp; government employees do not pay into SS. The government figures the retirement plan is sufficient. (for them yea). So, those earnings will not show in your SS package. Sucks!
Reply:It depends on the state, but if you have a state retirement package offered to you (in CA, I have CalPers), they are not required to take out taxes for Social Security because they are already taking a portion of your income out of your check toward that retirement system. If you do not contribute Social Security taxes, then you never receive credit for having worked those quarters. If you resume working at a regular job that does take the taxes out, then you will again start earning credits for each quarter toward your Social Security retirement. You need a certain number of quarters worth of credit (taxes paid into the Social Security system) to even qualify for Social Security payments upon retirement. If you have enough credits in Social Security, plus a state retirement income, you may still qualify for a lesser Social Security payment, depending on the amount from the state or other retirment systems you are receiving.
Reply:Have you ever looked at your paystub? Any SS taken out? You are probably in a government approved pension plan and do not have to pay into SS. You are correct that your earnings from this job don't count - why would they - you didn't pay in. You will have to contact HR Dept. to determine the value, if any, of your pension when you leave. It will depend on how long you have worked for the state.


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