Department of the Treasury - Internal Revenue Service
14581-C
Form
Medicare Coverage Compliance Self-Assessment
(June 2017)
For State and Local Government Employers
Medicare Coverage – Publication 963
1.
Are any employees exempt from Medicare under the continuing employment
Yes
No
Follow Up
exception
Note: Almost all state and local government employees are covered by Medicare. All employees covered under a Section 218
Agreement are covered and employees covered by mandatory Social Security provisions are covered, unless the employee meets the
continuing employment exception under Internal Revenue Code (IRC) Section 3121(u). The continuing employment exception applies
to an employee hired or rehired by a state or political subdivision employer before April 1, 1986, only if the employee is a member of a
public retirement system within the meaning of IRC Section 3121(b)(7)(F) and meets all of the following requirements:
• The employee was performing regular and substantial services for remuneration for the state or political subdivision employer
before April 1, 1986;
• The employee was a bona fide employee of that employer on March 31, 1986;
• The employment relationship with that employer was not entered into for purposes of avoiding the Medicare tax; and
• The employment relationship with that employer been continuous since March 31, 1986.
Note: The IRC also exempts employees performing the following services from mandatory Social Security and Medicare taxes:
• Services performed by individuals hired to be relieved from unemployment.
• Services performed in a hospital, home or other institution by a patient or inmate thereof as an employee of a state or local
government.
• Services performed by an employee hired on a temporary basis in case of fire, storm, snow, earthquake, flood or similar
emergency.
• Services performed by a nonresident alien temporarily residing in the U.S. holding an F-1, J-1, M-1 or Q-1 visa, when the services
are performed to carry out the purpose for which the alien was admitted to the U.S.
• Services in positions compensated solely by fees received directly from the public are subject to SECA (Self-Employment
Contributions Act) taxes, unless a Section 218 Agreement covers these services.
• Services performed by a student enrolled and regularly attending classes at the school, college or university for which they are
working, unless a section 218 Agreement covers these services. Refer to
for the student exclusions for each state.
• Services performed by election officials or election workers paid less than the calendar year threshold amount mandated by law
unless a Section 218 Agreement covers election workers.
• Services that would be excluded if performed for a private employer because they are not work defined as employment under
Section 210(a) of the Social Security Act
Contact the State Social Security Administrator with any questions pertaining to the foregoing.
Comments
2.
Are there any employees from whom Medicare is not withheld, other than those who
Yes
No
Follow Up
meet the exceptions identified above
Comments
3.
Does the entity employ any rehired annuitants
Yes
No
Follow Up
Note: Rehired annuitants are retired individuals who are rehired by their employer or another employer that participates in the same
retirement system as the former employer. This includes a former participant in a state retirement system who has previously retired
and who is either:
1. Receiving retirement benefits under the retirement system, or
2. Has reached the normal retirement age under the retirement system.
Comments
14581-C
Catalog Number 69846U
Form
(6-2017)