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Graduate Medical Education

Events & Announcements

STATUS UPDATE FOR FICA CLAIMS, JANUARY 30TH, 2012

 

      The status of the FICA Tax Reimbursement claim which was filed on behalf of the hospital and all affected Residents is, as of January 30th, 2012, as follows:

 

      The claim was filed in the fall of 2010.  In the winter of 2010, the IRS commenced its original audit of the claim and advised that they expected the reimbursement to issue sometime in the late spring or early summer of 2011.

 

      Unfortunately, due to issues that needed to be worked out between the IRS and the Social Security Administration, the audit phase was put on hold for much of 2011.  However, by the late fall 2011 it had commenced again, and as of January 30th, 2012, the claim of the hospital has now been fully audited and has been referred for payment processing.

 

      We are advised at this time that it is expected that payment will issue for reimbursement within the next 90 days.  The Department of the Treasury will issue two checks for the refund, one for the hospital’s portion of the claim, and one for the Resident’s portion of the claim.  The hospital in turn, will then issue separate checks to each affected Resident, consistent with the amount due to each such Resident based on their Residency, amount withheld during their Residency, etc., together with interest earned on said sum.

 

In connection with the distribution to be made by the hospital to the Residents, please be advised of the following:

 

1.      Each affected Resident will receive from the hospital a revised W-2 reflecting the adjusted amount earned as a result of the refund, together with a 1099-INT (showing the interest earned on the refund) for 2012.

 

2.      Taxes will be due and a payable for 2012 on the interest earned, as reflected on the 1099-INT.

 

3.      Pursuant to the requirements of the IRS during their audit of the claim, adjustments were made for the amount of income earned by some Residents during their Residency due to moonlighting.  In those cases, the IRS did not “recognize” the amount of income earned in any moonlighting capacity (essentially, any amount of income earned by a Resident over and above the “base” Residency stipend for any given year), and accordingly, the amount of the refund for any such affected Resident is based solely on the “base” Residency stipend, and not on the full amount any such Resident may have earned in that given year.

 

4.      Once the hospital receives payment from the Department of the Treasury, it is anticipated that payment will issue to each respective Resident within 45 days thereafter.  The hospital will keep all Residents informed and up to date as to the status of the claim.

 

The information set forth above is intended only as an update to the status of the Hospital’s and Resident’s pending FICA Tax Reimbursement claim and not as tax advice.  The information provided is general in nature and is provided solely to keep Residents aware of the status of the pending refund.  Each Resident is advised to consult with his or her accountant, attorney or other tax professional to discuss the effect, if any, which this refund may have on your tax situation.

 

 

 

 

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This page was last updated on: January 30, 2012.