3121 Alt-FICA Plan
What is the 3121 FICA Alternative Plan?
The Omnibus Budget Reconciliation Act of 1990 (OBRA) Amended the Internal Revenue Code and the Social Security Act to include employees of state and local governments. The Act authorized the Secretary of the Treasury to adopt regulations and provide guidance to the Internal Revenue Service and Social Security Administration. The Act amended Internal Revenue Code Section 3121, under which Social Security participation became mandatory for all employers. However, the Internal Revenue Code Section 3121 says that part-time, temporary, and seasonal (PTS) employees are exempt from the Social Security tax if they are provided a “comparable retirement system”. In response, the 3121 Plan was created as an authorized alternative to Social Security to meet those requirements.
Please visit Schools First Credit Union for further information at SchoolsFirst