We agree to review the agreements mentioned in Section 218 for the other eight school districts mentioned in the OIG review, and if we see any problems in this review, we will take appropriate action. We agree to review the section 218 agreement for the seven school districts in which, under the amendment of this agreement and in accordance with federal tax law, Texas State University grants an exemption from the FICA tax deduction on salaries paid to a student during a university semester or a summer in which that student is enrolled and regularly attends university. We partially support this recommendation. Our guidelines for the OPG `last-day` exemption are based on the law in force prior to the 2004 Social Security Act. These guidelines are appropriate and have been reviewed and approved by our General Questions Office. However, we agree to verify whether there is an agreement in place for the school district under Section 218. There are thousands of local authorities (cities, counties, special districts, school districts, JPAs) in California. Of these, only 500 parties are parties to the agreement of paragraph 218 with the SSA. This means that there are thousands of people who do not have an agreement under Section 218.
Here is the “gotcha:” If an employee of a local government who does not have an agreement under Section 218 participates in a replacement plan, that employee cannot also participate in social security. This is a potentially very important problem, as there are dozens, if not hundreds, of local governments and instrumentalities in California in California, who do not have an agreement under Section 218, but who participate in Social Security on a “voluntary” basis. It is clear that they can do so as long as they do not provide replacement benefits to any of their FICA insured employees. The problem is that most of them offer “unknowing” replacement plan type benefits. In this case, this can be done on the basis of staff-for-employee and salary to the other. As a result, affected workers cannot have employers or employees pay wage contributions on their behalf. In addition, these pay periods cannot be charged on workers` final social security benefits. An agreement under Section 218 is a voluntary agreement between the state and the Social Security Administration (SSA), which provides coverage for Social Insurance and Hospital Insurance (MEDICARE) or Medicare HI-only for employees of the state and local authorities. These agreements are referred to as “Section 218” because they are authorized by Section 218 of the Social Security Act.