Under certain circumstances, New York City employees may be exempt from social security and/or Medicare taxes. If you fall into one of the following categories, you may be exempt from social security or Medicare taxes:
- Not a pension member and contribute 7.5% or more to a 401(k), ROTH 401(k), 403(b) or 457 Deferred Compensation Plan/Tax Deferred Annuity (DCP/TDA)
- City pension plan member in 1957 electing not to have social security
- Half time CUNY student working at CUNY
- Non-resident student or teacher admitted to the US under certain visas
- Foster Grandparent working for the Department of Aging
- Election Inspector/Worker earning less than $1,600 from the Board of Elections
- Beneficiary of a deceased employee receiving payment after the calendar year of the employee's death
- Temporary emergency relief employee
The Social Security Protection Act of 2004 requires newly hired public employees to sign a "Statement Concerning Your Employment in a Job Not Covered by Social Security". Form SSA-1495 explains the potential effects of two provisions in the Social Security law on workers whose earnings are not covered under Social Security. For more information, Social Security publications, and additional information about exceptions to each provision, are available at www.socialsecurity.gov. You may also call toll free 1-800-772-1213 or contact your local Social Security office.
Employees Who are Not Members of a Pension Program
If you are not a City pension member and do not have a 401(k), ROTH 401(k), 403(b), or 457 Deferred Compensation Plan/Tax Deferred Annuity (DCP/TDA) or contribute less than 7.5% to your TDA, you are subject to social security and Medicare taxes.
You are not subject to Social Security or Medicare tax if you meet these three requirements:
- You are not a member of a City pension system
- You contribute 7.5% or more of your compensation to a 401(k), ROTH 401(k), 403(b) or 457 DCP/TDA
- You have a City start date prior to April 1, 1986
You are not subject to social security but must pay Medicare tax if you meet these three requirements:
- You are not a member of a City pension system
- You contribute 7.5% or more of your compensation to a 401(k), 403(b), or 457 DCP/TDA
- You have a City start date on or after 4/1/86
You may enroll in a TDA/DCP at any time. If you are not a member of a City pension, you may substitute deferred compensation contributions for social security as long as you contribute at least 7.5% of your earnings to your TDA/DCP.
If you are a newly hired employee and enroll in a TDA/DCP plan with a rate equal to or greater than 7.5% during the first 30 days of City employment, you are entitled to a refund of moneys deducted for social security (but not Medicare) from the date of
hire until the TDA/DCP contributions start.
If you are transferring to another agency without a break in service, it is your responsibility to notify the TDA/DCP plan administrator of the transfer. Your new agency is required to withhold social security and Medicare until the contribution to the TDA/DCP plan is re-established.
The TDA/DCP administrator will notify OPA when the contribution is re-established. OPA will process a FICA refund for the amount withheld during the transfer period as long as you were exempt from social security at the previous agency.
If you are in this category, you cannot contribute to social security unless you lower your contribution to your TDA below 7.5% or join a pension. If you decide to pay into social security, your contributions to your TDA account must be less than 7.5% of your gross earnings and cannot exceed 7.5% of the wage base for the calendar year.
If you are in the above category and obtain civil service status, you are required to join a City pension. You will begin paying social security when you submit a pension application or six months after your civil service entry date, whichever is later.
Learn more about pensions
Find out about Deferred Compensation Plans
Pension Members in 1957
If you are a City employee belonging to a City pension plan who elected not to have social security coverage in 1957 ("no voters") when the City joined the social security system, you are not subject to social security and Medicare.
CUNY Students Working at CUNY
You are exempt from social security and Medicare if you are a CUNY student working at CUNY and:
- You are at least a half-time undergraduate, graduate, or professional student
- You are at least a half-time undergraduate, graduate, or professional student enrolled in the number of credit or unit hours to complete the requirements of obtaining a degree offered by CUNY
The FICA exemption does not apply if you are not enrolled in classes during breaks of five weeks or more, including summer.
Less than half-time students of CUNY who are employed at CUNY and CUNY students working for the City but not at CUNY are subject to social security and Medicare taxes.
Nonresident Teachers, Trainees, or Students
If you are a nonresident alien admitted to the US under either of the following conditions, you are not subject to social security tax:
- You are a student with an F, J, M, or Q visa who has been exempt as a teacher, trainee, or student for fewer than five calendar years
- You are a teacher or trainee with a J or Q visa who has been exempt from social security tax as a teacher, trainee, or student for few than two of the last six calendar years.