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Is the position or service covered for Social Security and Medicare under a Section 218 Agreement?

If the answer is “No,” then go to the next question.

If the answer is “Yes,” then withhold Social Security and Medicare, unless Section 218 Mandatory and Optional Exclusions apply (see SL 30001.356 and SL 30001.357).

Is the employee a qualified member of a public retirement system?

If the answer is “No,” then withhold mandatory Social Security and Medicare, unless an exclusion from mandatory Social Security and Medicare applies (see SL 50001.560).

If the answer is “Yes,” then go to the next question.

Is employee covered by a Section 218 Agreement that provides Medicare-only coverage for employees hired prior to April 1, 1986?

If the answer is “Yes,” then withhold Medicare for that employee, unless Section 218 Mandatory and Optional Exclusions apply (see SL 30001.356 and SL 30001.357).

If the answer is “No,” then go to the next question.

Does the Medicare Continuing Employment Exception apply?

If the answer is “Yes,” then do not withhold Social Security or Medicare (see SL 50001.520.

If the answer is “No,” then withhold Medicare only, unless there is an exclusion from mandatory Medicare (see SL 50001.530).

CAUTION

This information is meant as a guide only and is not a substitute for discussing difficult Section 218 coverage situations with your State Social Security Administrator or FICA taxation issues with your IRS FSLG Specialist. The above references can be found in the State and Local Coverage Handbook.