SR 15-02 Dated 01/15

STATE OF NEW HAMPSHIRE

INTER-DEPARTMENT COMMUNICATION

SUMMARY

This SR releases:

·      withholding rates for FICA (Social Security) and FIT (Federal Income Tax); and

·      FICA income ceiling.

FICA and FIT withholding rates are allowed in determining self-employment income for most programs and nursing facility and HCBC employment expense disregards. Employment expense disregards are based on allowable FIT and FICA withholding deductions.

POLICY

FICA (Social Security)

·      The 2015 FICA withholding rate for both employees and employers has not changed and will remain at 7.65%. This subdivides into 6.20% for the Social Security (OASDI) share and 1.45% for Medicare’s (HI) portion.

·      Self-employed individuals pay a FICA withholding rate of 15.3%. These individuals may deduct from income tax one half of the 15.3% paid for the year as a business expense. The actual rate becomes 7.65% after the deduction.

·      For employees and employers, the Medicare portion of the FICA rate is 1.45% on 100% of earned income; for a self-employed individual, the rate is 2.9% on 100% of earned income.

FICA Income Ceiling

·      The income ceiling subject to the full FICA withholding rate has increased from $117,000 to $118,500.

·      There is no ceiling to the amount of gross earned income from which Medicare may be withheld.

FIT (Federal Income Tax)

District Offices use IRS Circular E to determine the applicable federal income tax (FIT) withholding rate. The federal withholding rates are not expected to change this year. As of January 1, 2015, the 2014 Circular E will be obsolete. Electronic copies of the January 2015 IRS Circular E will be sent to each District Office under separate cover when they are released by the IRS.

Federal Minimum Wage

The 2015 Federal minimum wage, effective as of 7/24/09, remains at $7.25 per hour.

POLICY MANUAL REVISIONS

Along with the annual figure updates, Table H has been added to PART 601 in the Adult Assistance manual, and a column for the State minimum wage has been added to Table H in all four policy manuals. The title of Table H has been revised to include the addition of the State minimum wage figure.

Revised Adult Assistance Manual Topics

PART 601, TABLE H  Federal Taxes, Income Ceilings, and Federal/State Minimum Wages

Section 603.03   Employment Expense Disregard

Revised Family Assistance Manual Topics

PART 601, TABLE H  Federal Taxes, Income Ceilings, and Federal/State Minimum Wages

Revised Food Stamp Manual Topics

PART 601, TABLE H  Federal Taxes, Income Ceilings, and Federal/State Minimum Wages

Revised Medical Assistance Manual Topics

PART 601, TABLE H  Federal Taxes, Income Ceilings, and Federal/State Minimum Wages

Section 603.03   Employment Expense Disregard

IMPLEMENTATION

All policy changes in this SR are effective January 1, 2015

CLIENT NOTIFICATION

No client notification is required as the information is for agency staff use only.

TRAINING

No special training is planned or needed.

DISPOSITION

This SR may be destroyed or deleted after its contents have been noted and the revised manual topics released by this SR have been posted to the on-line manuals.

DISTRIBUTION

This SR will be distributed according to the electronic distribution list for Division of Family Assistance policy releases. This SR, and revised On-Line Manuals, will be available for agency staff in the On-Line Manual Library, and for public access on the Internet at www.dhhs.nh.gov/DFA/publications.htm, effective December 29, 2014. Additionally, this SR, and printed pages with posting instructions, will be distributed under separate cover to all internal hard copy holders of the Adult Assistance, Family Assistance, Food Stamp, and Medical Assistance Manuals.

DFA/KD:s