[SchoolFinance] PFML question

Thu Dec 5 09:41:17 EST 2024

I was on a zoom meeting with Reggie presenting to our local Chamber this morning. I asked about deducting section 125 amounts before calculating the tax – his answer was to calculate the tax on gross wages before any taxes.

Deb

From: SchoolFinance <schoolfinance-bounces at maillist.informe.org> On Behalf Of Lisa Harkin
Sent: Thursday, December 5, 2024 8:46 AM
To: Moderated information sharing for school business managers <schoolfinance at maillist.informe.org>
Subject: Re: [SchoolFinance] PFML question

Thanks Stacie for the clarification about SUTA and FUTA being employer taxes.  Although a portion of FICA is employer, but we won't go there!
This really is a bad situation.

On Wed, Dec 4, 2024 at 3:41 PM Field, Stacie <sfield at rsu16.org<mailto:sfield at rsu16.org>> wrote:
Yes, I looked at the Circular E, and pub 15-A and 15-B. Also spoke directly with Tim Applegate, and the IRS last week.
I keep arguing you cannot tax an employee on Section 125 or 403(b) reduction agreements. Not getting anywhere.
SUTA and FUTA are employER taxes, not employEE, so none of this matters.

We have to honor reduction agreements, which are under IRS regulations.
I do not believe the State of Maine can override the IRS.  I don't feel I have gotten anywhere. I am just hoping for a lawsuit down the road. If I can find an attorney willing to take it on, I'll start one.   My two cents, less .5% of course.

Stacie Field
Business Manager
RSU 16 - Poland, Mechanic Falls, Minot
207.998.2727 ext 102

On Wed, Dec 4, 2024 at 3:02 PM Lisa Harkin <lharkin at kitteryschools.com<mailto:lharkin at kitteryschools.com>> wrote:
OK, me again, last post I promise.
Has anyone looked at the Circular E?
Exempt from FUTA (ie PFML?)

Government employment:

1. State/local governments and political subdivisions, employees of:

a. Salaries and wages (includes

payments to most elected and appointed officials). See

chapter 3 of Pub. 963.

AND

Insurance for employees:

1. Accident and health insurance

premiums under a plan or system for

employees and their dependents generally or for a class or classes of

employees and their dependents

On Wed, Dec 4, 2024 at 2:34 PM Andrea Disch <adisch at msad11.org<mailto:adisch at msad11.org>> wrote:
Yes, Lisa, my apologies for not being clearer.

It was clarified during yesterday's PFML portal webinar that PFML does not allow for the carve-out earnings exemptions that are available under unemployment.

Andrea Disch
Business Manager

Maine School Administrative District No. 11
150 Highland Avenue • Gardiner, Maine 04330

207-582-5346
aDisch at msad11.org<mailto:aDisch at msad11.org>
www.msad11.org<http://www.msad11.org>

On Wed, Dec 4, 2024 at 1:12 PM Lisa Harkin <lharkin at kitteryschools.com<mailto:lharkin at kitteryschools.com>> wrote:
I heard that PFML has the same exemptions as SUTA and FUTA, so I am deducting Health and Dental from gross wages.
Reading your reply again, you are talking about earnings, not exemptions to gross earnings, so Health exemptions are a completely different subject.  Apologies.

Some volunteers get paid, oxymoron, I know.

On Wed, Dec 4, 2024 at 10:59 AM Andrea Disch <adisch at msad11.org<mailto:adisch at msad11.org>> wrote:
MSAD 11 will be deducting PFML from all school board member compensation, as well.
It was stated again at yesterday's meeting that PFML does not have the earnings exemptions that SUTA has, including school board members.

Andrea Disch
Business Manager

Maine School Administrative District No. 11
150 Highland Avenue • Gardiner, Maine 04330

207-582-5346
aDisch at msad11.org<mailto:aDisch at msad11.org>
www.msad11.org<http://www.msad11.org>

On Wed, Dec 4, 2024 at 9:12 AM Coulombe, Jessica <jessica.coulombe at rsu4.org<mailto:jessica.coulombe at rsu4.org>> wrote:
Hello!

A question I have is for School Board members. I am thinking that PFML wages would be subject to the PFML deduction., as we consider them volunteers that receive an honorarium stipend.  Your thoughts?

Thanks
Jessica

On Wed, Dec 4, 2024 at 9:01 AM Andrea Disch <adisch at msad11.org<mailto:adisch at msad11.org>> wrote:
I have not received any specific guidance regarding but we are being told that there are few exceptions to PFML, fewer exceptions than for SUTA.
My guess would be that if the wage flows through payroll, and you would withholdSUTA, you will also need to withhold PFML taxes.

Andrea Disch
Business Manager

Maine School Administrative District No. 11
150 Highland Avenue • Gardiner, Maine 04330

207-582-5346
aDisch at msad11.org<mailto:aDisch at msad11.org>
www.msad11.org<http://www.msad11.org>

On Mon, Dec 2, 2024 at 2:44 PM Krol, Gabrielle <gabrielle.krol at msad52.org<mailto:gabrielle.krol at msad52.org>> wrote:
Good Afternoon,

I am wondering if anyone has seen or heard any guidance on if we are imposing this tax to Cash in Lieu, or Travel stipends.  I may have missed this guidance.

Thank you!

--
Gabrielle Krol
Business Manager
MSAD 52
486 Turner Center Road
Turner, ME 04282
207-225-1006
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Jessica Coulombe
Payroll Specialist
Wellness Coordinator
RSU 4
971 Gardiner Rd
Wales, Me 04280
207-375-4273 ext 175  or Option 2
fax:207-375-2522
jessica.coulombe at rsu4.org<mailto:jessica.coulombe at rsu4.org>

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Finance Manager
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