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Thread: FICA Withdraw North Carolina

  1. #1

    Default FICA Withdraw North Carolina

    I am paid as a commission employee and have for many years. Can the employer make the employee pay their (THE Company) part of FICA PLUS employee must pay his/hers?

  2. #2
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    FICA means IRS rules (Internal Revenue Code). We need to know more about your job duties and your industry to see what the related IRC requirements are. If your employer is governmental in nature for example, that would be important. Most federal laws have at least some exceptions.

    My reference book (The Payroll Source Book) list about one page of exceptions under What Wages are Exempt from Social Security and Medicare Taxes, and an additional half page of exceptions under What Types of Employment are Exempt from Social Security and Medicare Taxes.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

  3. #3

    Default FICA Withdraw North Carolina

    Simply I am commission Only via W2 and work as a Mortgage Banker - Loan Officer. Paid on a monthly basis. We are not goverment controlled and this is a Privately owned company. Hope that helps

  4. #4
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    Do you get a W2 or a 1099 at year end?
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

  5. #5

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    W-2 - Always

  6. #6
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    OK. All workers are legally either employees or independent contractors (IC). By issuing a W2, the employer is admitting that you are an employee (which is good for you).
    - Nothing you said indicates an IRC exception regarding FICA is very likely. Meaning that likely the employer is breaking the law by failing to withhold FICA. If I had to make a wild guess I would say that the employer is (incorrectly) trying to use the "statutory nonemployee - direct seller" exception. The problem is that based on what you have said, your duties do not qualify you for this exception. Just to be sure, are you actually spending the majority of your time knocking on doors selling this product? Like say an Avon sales person. If so, the employer has a maybe argument. If instead you are mostly working from an office, this exception will not work. Past that, I do not think that mortgages fall under the "consumer product" definition associated with this exception, although if you really are spending all of your time selling mortgages door-to-door it would not hurt asking IRS directly.
    - Not your question, but it is not legally possible for you to be a 100% commission employee based on what you have said. This has been in court a lot over the past 5 years. Once upon a time some Mortgage industry publication made the claim that employers in that industry said that their employees qualified for the Outside Sales exceptions, even though they worked in an office. Federal DOL said, heck no, took the Mortgage industry (plus bankers, stock brokers and other financial industries) to court and the feds won big time. Hundreds of millions of dollars of judgments. Bottom line, your employee MUST track your hours actually worked, MUST pay you at least minimum wage for those hours, and MUST pay overtime if applicable. You will get a lot of hits if you Google search this.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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