MPSERS 3% retiree contribution withholding tax refund 2017-2021
Update, June 2021:
All employees and retirees who were eligible to participate in this program received an email notification on June 2, noting that the withholding refund period for this process has concluded. If you believe that you should be included in the program (signed an Agreement) but did not get this notification, please contact the Payroll Department at mpsers3@hfcc.edu, and they will assist you. Those who decided not to participate will receive additional information later in June.
Michigan public school employees who did not opt out of the retiree health coverage under the Michigan Public School Employees Retirement System (MPSERS) Act are required to make 3% contributions to the MPSERS Health Care Trust for retiree health coverage.
There has been an ongoing challenge by the MPSERS to the IRS regarding the taxable nature of the 3% Retiree Insurance deduction that is deducted from your pay.
This deduction has been exempted from your Federal taxable wages, but not from Social Security or Medicare wages. Recently, the IRS has entered into a Settlement Agreement with MPSERS indicating that these deductions should also be exempt from Social Security and Medicare wages. Henry Ford College (HFC) has joined into this Settlement Agreement.
What does this mean to you, if you have been part of MPSERS?
Your Medicare wages, and possibly your Social Security wages, were overstated, as well as your withholdings for these.
How will HFC correct this situation?
For tax years 2017-2020, we will be issuing amended W-2’s (Form W-2C). Additionally, we have calculated the amount of Social Security and Medicare withholdings that were over-withheld and are due to you from HFC.
Read the information below to understand more about how this process will work, and to obtain the overpaid taxes that are due to you.
To receive the best service, please review all the information on this webpage.
We are providing detailed information to allow you to participate, or choose not to participate, in receiving a refund from HFC. We ask that you carefully review the information on this webpage before contacting us with questions. You will probably find your questions answered on this webpage.
For your information safety and security
We have recently been notified by the IRS of tax refund scams targeting educational institutions. As you know, phishing is a common practice, and it is important to always know whether your online activities are legitimate and safe.
Please keep in mind that no one from HFC will ever ask you to provide information such as your social security number, passwords, and other private data over the phone or through email. When you are providing the required personal information to obtain your MPSERS tax overpayment rebate, be certain that you are on the secure HFC website or portal, which always begins with the address https://www.hfcc.edu or https://my.hfcc.edu. The "s" in "https" is important.
Do not respond to email messages originating outside HFC about this or related matters. Do not send private information or data through email. Do not give private information to people over the phone, unless you are certain of whom you are talking to and how they will use the information.
How do you find out what is owed to you? And how can you receive these funds through HFC?
We have created a web page where you will need to enter your HANK ID to determine if you are affected.
Login to my.hfcc.edu to see the form
Current employees will need to sign into the employee portal, while retirees / former employees will need to enter your HFC username and password. If you do not remember your username or your password, you can re-set it or get help.
Once this is done, the information for each year 2017 through 2020 will be viewable in a web form that includes these items:
W-2 Information:
- Social Security Wages
- Social Security Withholdings
- Medicare Wages
- Medicare Withholdings
- Retiree Insurance Deduction
Adjustments:
- Social Security Wage Reduction
- Social Security Withholding Adjustment
- Medicare Wage Reduction
- Medicare Withholding Adjustment
- Total Withholding Adjustment
You must fill out the form in order to receive a refund through HFC
HFC will be amending our payroll tax returns for this same time frame. In order for us to collect the employee portion that we will be refunding to you, we must obtain an agreement from you that you will not be seeking this refund directly from the Social Security Administration.
You will be required to check a box to this effect on the web form. Finally, you will be required to sign the form (by printing your name). The web form will ask you if you would like a copy of the form emailed to you, and you can enter your email address if you would like a copy.
If you choose not to fill out the form and check the box, you will not be able to receive a refund through HFC. See additional information in the "Do you have to participate in this agreement and sign the web form?" section below.
How are the Social Security and Medicare withholding adjustments calculated?
The Social Security withholding adjustment is 6.2% of the Social Security wage reduction. The Medicare withholding adjustment is 1.45% of the Medicare wage reduction.
How long do you have to participate in this agreement? (Deadline May 28, 2021)
The web form will be available until May 28, 2021. After this point, you will not be able to obtain a refund from HFC, and you will be considered to have declined the agreement for HFC to seek this reimbursement for you.
If you agree to the terms of the web form, when will you be paid?
Our plan is to create one special payroll run to pay all current and former employees by mid-June 2021. We are required by law to provide at least 45 days to those affected to enter into this agreement. That is the cause for a potential delay in receiving your amount due.
Current employees will receive your refund via direct deposit.
Former employees will receive a paper check in the mail.
Do you have to participate in this agreement and sign the web form?
You do not have to participate.
However, if you do not participate as indicated, we will not be able to reimburse you for the over-withheld employee payroll taxes. If you do not participate, you will receive additional communication from HFC after the time to participate expires.
Will you be required to file amended federal and state returns based on the amended W-2C’s that you receive?
In most cases, since neither federal nor state taxable wages are changing, it does not appear that amended returns are required. However, HFC cannot provide you with tax advice. There may be situations that would call for an amended return. We recommend that you consult a tax professional for assistance if you have questions.
What about this deduction in 2021? How will this be handled?
Effective with payrolls with pay dates after April 1, 2021, these deductions will no longer be included in Social Security or Medicare wages and will be exempt from withholding. In May, payroll will refund social security and Medicare taxes withheld, on the 3% retiree healthcare deductions, from payroll checks dated 1/1/21 through 3/31/21.
Your 2021 W-2 will be properly taxed for the 3% Retiree Insurance amount.
When will you receive your W-2C’s?
You will receive them in June. Current employees can reduce our environmental impact by opting to receive your W-2 electronically in the self-service portal. Sign in to my.hfcc.edu as an employee, select “Self-service,” then select “Employee,” then “Tax Information”. You may select the option to receive your W-2 electronically. This will help us reduce paper use and costs by not having to mail forms to you.
Why is your Social Security Adjustment less than your Medicare Adjustment?
This could happen for two reasons. Both have to do with the FICA wage maximum for Social Security withholding. Those limits were as follows for the years 2017, 2018, 2019, and 2020, respectively: $127,200, $128,400, $132,900, and $137,700. If your Social Security Adjustment is $0, this is because your Medicare wages exceeded your Social Security wages by more than the 3% Retiree Insurance Deduction. While your Medicare Adjustment would equal your 3% Retiree Insurance Deduction, this amount would still exceed the FICA maximum for Social Security withholding.
In a few instances, the Social Security Adjustment is less than the Medicare Adjustment, but is not $0. This means the difference between your Medicare wages and your Social Security wages was less than the amount of the 3% Retiree Insurance Deduction. In these cases, the Social Security Adjustment would be the 3% Retiree Insurance Deduction less the difference between you Medicare wages and you Social Security wages. This happens when someone is over the FICA Social Security maximum, but not by more than the 3% Retiree Insurance Deduction.
How does this affect your Social Security benefits?
Social Security benefits are based on your earnings over your working lifetime. Accordingly, based on your personal circumstances, a refund could have a detrimental effect upon disability, survivors, or retirement benefits that you, or your family, are receiving or may seek to receive in the future from Social Security. If you want information about the effect on your Social Security benefits, you should contact SSA directly at 1-800-772-1213 (toll free). You might want to review your Social Security record before and after your refund has been processed. You can use your current Social Security Statement, or you can request a copy of your Social Security statement from the Social Security Administration.
How can retirees / former employees login to see the form? What if you don't know your password?
Retirees and former College employees may login to my.hfcc.edu using their HFC username (the part of your HFC email address preceding "@hfcc.edu").
If you do not remember your username or your password, you can re-set it online.
If you have followed the directions above and are still unable to login, you may call 313-845-6345 during regular business hours.
What if you have questions that are not answered on this website?
We have an email address that we will be monitoring for questions. Please send them to mpsers3@hfcc.edu. Please leave a phone number where you can be reached and provide your Hank ID. We will make every effort to respond as quickly as possible to your questions.