SL 40001.477:
Reporting New Government Components
Effective Dates: 12/16/2004 - Present- Effective Dates: 01/03/2018 - Present
TN 1 (12-04)- TN 9 (01-18)
- SL 40001.477 Reporting New Government Components
A. PURPOSE OF REPORTING NEW GOVERNMENT COMPONENTS- A. Purpose of reporting new government components
To insure accurate SSA and IRS Section 218 coverage records, a State should notify SSA and IRS of the existence of a new component that is an integral part of a political subdivision. The component is usually created by an existing political subdivision, such as a city or county, which has previously covered its employees under a Section 218 Agreement. Unlike other integral parts in the political subdivision, this component has its own payroll, bookkeeping, tax reporting system, EIN, etc. There is no need for a new modification, but still, SSA and IRS should know that the new component is covered under the political subdivision’s existing modification.- To insure accurate SSA and IRS Section 218 coverage records, a State should notify SSA and IRS of the existence of a new component that is an integral part of a political subdivision. The component is usually created by an existing political subdivision, such as a city or county, which has previously covered its employees under a Section 218 Agreement. Unlike other integral parts in the political subdivision, this component has its own payroll, bookkeeping, tax reporting system, employer identification number (EIN), etc. There is no need for a new modification, but still, SSA and IRS should know the political subdivision’s existing modification covers the new component.
For example, a city has executed a Section 218 Agreement that covers all services performed by city employees for Social Security purposes. The city subsequently creates a recreation board to oversee the city’s recreational facilities. However, the recreation board is not considered a separate political subdivision under state statute, but constitutes a department of the city. The recreation board has a separate payroll system from the city, applies for and receives an EIN, withholds the appropriate employment taxes and reports such taxes and wages to the SSA and IRS.- For example, a city has executed a Section 218 Agreement that covers all services performed by city employees for Social Security purposes. The city subsequently creates a recreation board to oversee the city’s recreational facilities. However, the recreation board is not a separate political subdivision under state statute, but constitutes a department of the city. The recreation board has a separate payroll system from the city, applies for and receives an EIN, withholds the appropriate employment taxes and reports such taxes and wages to the SSA and IRS.
B. NEW GOVERNMENT COMPONENT NOTIFICATION PROCESS- B. New government component notification process
- New government component reporting must be done by following the new government component notification process:
- * The political subdivision should inform the State Administrator of the new component’s name, address, the modification that covers the component, the component’s EIN and the effective date of coverage. In addition, the political subdivision must submit evidence of the establishment of the component (See SL 40001.477C). If this evidence is not provided, then the State must obtain it.
* The State completes and sends the Notification of a New Government Component form (See SL 40001.490F, Exhibit 24), with ink signatures, in duplicate along with the establishing evidence to the PSSO. If the State wants more than one signed copy, it must provide the extra copies.* After reviewing the evidentiary documentation and verifying the information shown on the Notification of a New Government Component form, the PSSO forwards the material to the regional office for technical and legal review and clearance.* When the regional office completes its review of the notification and accompanying legal documentation, it either notifies the State that the legal documentation is acceptable or asks for additional information.* Once approved, a copy of the notification form is sent to the PSSO and to IRS, per existing State and Local Coverage Handbook procedures for notifying IRS (See SL 40001.420E).- * The State completes and sends the Notification of a New Government Component form (See SL 40001.490F, Exhibit 24), with ink signatures, in duplicate along with the establishing evidence to the Regional Office (RO). If the State wants more than one signed copy, it must provide the extra copies.
- * When the RO completes its review of the notification and accompanying legal documentation, it notifies the State the legal documentation is acceptable or asks for additional information.
- * Once approved, the RO sends a copy of the notification form to the IRS, per existing State and Local Coverage Handbook procedures for notifying IRS (See SL 40001.420F).
C. EVIDENCE OF THE ESTABLISHMENT OF A NEW GOVERNMENT COMPONENT- C. Evidence of the establishment of a new government component
The State must submit evidence legally sufficient to substantiate the establishment of a new government component which is an integral part of the political subdivision. The evidence may be in the form of a copy of the legal authority under which the new government component was established. This could be a copy of a city ordinance or a copy of the order of an authorized official which effectuated the establishment of the new government component. Where legislative authority is involved, either a reference to it or a copy of the legislation should be provided along with proof that this authority has been exercised. The documentation provided must show that the new government component is an integral part of the existing political subdivision.- The State must submit evidence legally sufficient to substantiate the establishment of a new government component that is an integral part of the political subdivision. The evidence may be in the form of a copy of the legal authority under which the new government component was established. This could be a copy of a city ordinance or a copy of the order of an authorized official, which effectuated the establishment of the new government component. Where legislative authority is involved, the State should provide either a reference to it or a copy of the legislation along with proof that this authority has been exercised. The documentation provided must show that the new government component is an integral part of the existing political subdivision.
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