[SchoolFinance] PFML question

Fri Dec 6 15:19:22 EST 2024

After attending webinars, reading the latest rules and updated FAQ, this is
how we are planning to proceed until we hear otherwise from the state or
the IRS:
1. We will be treating the employee share of PFML deductions as "post-tax",
so withheld on full gross pay, not reduced by any other deductions, even if
they fall under a Section 125 agreement.
2. We will be including anything we otherwise treat as "taxable" wages in
the 1% calculation. So that will include cash in lieu, travel stipends and
cell phone stipends.

FYI, I fully agree with everyone who has expressed their opinions about the
insanity of this law, particularly the fact that it includes public school
departments.
We have Enterprise ERP (AKA Munis) software, and they have provided no
guidance as to how we will produce our quarterly files for upload, or how
we will exclude from the reports the employee groups to whom the law does
not yet apply because of the October 2023 "temporary grandfathering" rule.
They are "looking into it".

Good luck to everyone.

On Thu, Dec 5, 2024 at 10:27 AM Field, Stacie <sfield at rsu16.org> wrote:

> Yes, that is what they are all saying.
> But, it is not right to disregard IRS reduction agreements for the
> employee portion.
> That is my argument.
>
> Stacie Field
> Business Manager
> RSU 16 - Poland, Mechanic Falls, Minot
> 207.998.2727 ext 102
>
>
> On Thu, Dec 5, 2024 at 10:02 AM Deb Roberts <DRoberts at msmaweb.com> wrote:
>
>> 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> 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>
>> 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> 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 <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>
>> 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> 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 <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> 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> 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 <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>
>> 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
>>
>>
>>
>>
>>
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>>
>> --
>>
>> Lisa Harkin
>>
>> Finance Manager
>>
>> _______________________________________________
>> SchoolFinance mailing list
>> SchoolFinance at maillist.informe.org
>> http://maillist.informe.org/mailman/listinfo/schoolfinance
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>>
>>
>>
>> --
>>
>> Lisa Harkin
>>
>> Finance Manager
>>
>> _______________________________________________
>> SchoolFinance mailing list
>> SchoolFinance at maillist.informe.org
>> http://maillist.informe.org/mailman/listinfo/schoolfinance
>>
>> _______________________________________________
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>> SchoolFinance at maillist.informe.org
>> http://maillist.informe.org/mailman/listinfo/schoolfinance
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>>
>>
>>
>> --
>>
>> Lisa Harkin
>>
>> Finance Manager
>> _______________________________________________
>> SchoolFinance mailing list
>> SchoolFinance at maillist.informe.org
>> http://maillist.informe.org/mailman/listinfo/schoolfinance
>>
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