Disability Wages

Today TaxMama hears from Leslie in the TaxQuips Forum who makes an excellent point. “When a Member of the Screen Actors Guild becomes disabled, in order to receive their Pension, they must sign paperwork. One of the acknowledgments is that “You have been made aware that FICA should not be taken out of your residuals BUT we are not going to help you!”  I never understood why the two groups, who are responsible for a performer cannot call up THEIR payroll company and say “This Person is disabled. Stop taking FICA from their residual check now!”  Or the Screen Actors Guild saying to the Residual Department, if this person gets a check with FICA deducted, return it to the Producer because it IS wrong!  How can I take steps to make sure that this will not happen to other members?” 

 Hi Leslie, 

You make a good point. And it applies to all taxpayers getting wages while on disability, or residuals or royalties, paid via payroll.

I know you’re active within your field of influence, among all the stunt people. [Note: Leslie was the first Stuntwoman elected to the Board of Directors of SAG, the AFTRA Local Board and AFTRA National Board.] Perhaps you can start an initiative to get the payroll services who work with actors to include a DISABLED box on the W-4 for the residual payments submitted by disabled SAG/AFTRA members?  

These unions are pretty powerful. And a lot money goes to those companies that process these payments. Perhaps a little pressure could be put on them?

In the meantime, maybe IRS could add a DISABLED box to the W-4 form as well?

I’ve passed on that suggestion to IRS – they like it. But, it will take about two years for the form changes to appear, once they’ve been approved. At least it’s a start.

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