COMPTROLLER'S SEAL STATE OF CONNECTICUT
STATE OF CONNECTICUT
OFFICE OF THE STATE COMPTROLLER
Kevin Lembo
State Comptroller
55 ELM STREET
HARTFORD, CONNECTICUT
06106-1775
Martha Carlson
Deputy Comptroller

MEMORANDUM NO. 2013-13

May 3, 2013

TO THE HEADS OF ALL STATE AGENCIES

Attention:   Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers
Subject:   FICA Withholding for Military Part Pay

I. PURPOSE

This memorandum is to notify agencies of a change for the Federal Insurance Contributions Act (FICA) withholding for state employees called to active military duty for a period of more than thirty days.

II. AUTHORITY

The Internal Revenue Service of the Federal Government bulletins Revenue Ruling 2009-11 FICA Contributions regarding differential wage payment to active duty members of the uniformed services.

III. WITHHOLDING

A differential wage payment, also known as part pay, is any payment made by the state to an employee for a period during which the employee is performing service in the uniformed services while on active duty for a period of more than thirty (30) days and represents all or a portion of the wages the employee would have received from the state if the employee were performing services for the state.
 
Effective January 1, 2009, differential wage payments the state pays employees who go on to active military duty in the uniformed services of the United States for a period of more than thirty days are subject to income tax withholding but not subject to FICA withholding.
 
Differential wage payments for employees called to active military duty for a state are not affected by the Ruling and continue to be subject to income tax withholding and FICA withholding.

IV. REFUND

Agencies must complete a W2-C to refund the FICA withholding for any affected employees.

V. QUESTIONS

Questions may be directed as follows:
Memorandum Interpretation: Office of the State Comptroller, Budget and Financial Analysis Division, (860) 702-3440;
   
Payroll Procedures: Office of the State Comptroller, Payroll Services Division, (860) 702-3454;
   
Core-CT Issues: Office of the State Comptroller, Payroll Core-CT (860) 622-2412.

KEVIN LEMBO
STATE COMPTROLLER

KL:ED

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