Attention Former Medical Residents of Miami Valley and Good Samaritan Hospitals
We are trying to notify all individuals who trained as medical residents at Miami Valley Hospital or Good Samaritan Hospital (“Hospitals”) during the period from January, 1995 through March, 2005 to inform you of a potential refund opportunity relating to the Social Security and Medicare (FICA) taxes that were withheld from stipends made to you by the Hospital(s).
The stipends you received due to your educational rotation as a medical resident at the Hospital(s) in the year(s) listed above were included on your Form W-2 as gross wages for the appropriate year. Federal income tax and FICA taxes were withheld from the proceeds. Based upon a recent Internal Revenue Service (IRS) concession on this subject, it has been determined that the stipends paid to you as a medical resident, although subject to income tax, are excludable from FICA taxes as having been paid incident to your training and study in the field of medicine.
IRS regulations permit an employer to file a single application to apply for a refund of FICA taxes on behalf of both the employer and employee. In order to preserve a possible claim for refund of these FICA taxes, the Hospitals had previously filed protective claims with the IRS for the FICA taxes paid on these stipends.
Important Filing Requirements
You may choose whether or not to participate in this refund request. In the event that any FICA taxes are refunded to you, then your future social security benefits may be affected. In order to participate in the refund for your share of the FICA taxes on these stipends, U.S. Treasury Regulations require that the Hospital must first obtain your written consent. Because of this rule, and as a result of the IRS concession on this subject, the originally filed protective claims will now need to be adjusted to remove FICA tax attributable to those residents who do not agree to be included in the claim. To complete this process, we need your help.
The consent form, available above, verifies the following:
- You have not previously claimed a refund or credit for the over-collected employee FICA taxes on these stipends.
- With the exception of this application, you will not be claiming a refund or credit of such amount from the IRS in the future.
Social Security benefits are based on your earnings record over your working lifetime. Accordingly, based on your personal circumstances, electing to receive a FICA tax 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. If you or your family member are currently receiving disability, survivors, or retirement benefits, or expect or hope to receive them in the future, you should contact a qualified professional advisor to discuss a refund’s possible effect on your or your family’s benefits. (The Hospitals cannot provide you with advice on that point or on tax issues.) If you would like general information about the possible effect on your Social Security benefits, you should contact SSA directly at (800) 772-1213. If you call or visit a Social Security office, please have this letter with you; it may help SSA answer your questions. You might want to review your Social Security earnings record before deciding whether to receive a refund, and after any refund you have sought has been processed. You can use your current Social Security Statement or you can request a copy of your Social Security Statement.
If you choose to participate in the refund claim, please complete (be sure to circle “Yes” for the years that you were a medical resident), sign, and date the enclosed consent, and mail as soon as possible to the address shown below. If you choose to participate, your refund will be based upon the books and records of the Hospitals. If you choose not to participate in the refund claim, please complete (circle “No” for all years), sign, and date the form and return it to us as soon as possible to the address below.
If we do not receive your signed Consent Form by October 7, 2010, we may not be able to include your share of the FICA taxes in the claim for refund. If you submit your Consent Form after October 7, 2010, we will, however, attempt to include it in the package being sent to the IRS. Although the IRS has recently conceded this issue, there is some risk the IRS may still deny the claim. If you agree to be included in the claim, the Hospitals will contact you once payment of the refund by the IRS is received. The Hospitals will then send you a check for your share of the FICA refund.
Helping to Find Those Qualified for Refunds
We would also ask that you share this information about the refund process with your peers. We are doing our best to locate all of those who are qualified for a refund of the applicable FICA taxes, and you may still be in contact with a former resident that we have been unable to locate.
A list of questions and answers is available for your review. If you would like further details, please contact us.
Finance – Medical Residents FICA
40 West Fourth Street, Suite 2110
Dayton, OH 45402-9547
Frequently Asked Questions
When will I receive my refund?
It’s not clear when the refunds will be issued. The IRS has not provided a specific timetable for the processing of these claims. Be assured that we are responding to all IRS requests and information gathering requirements in the most expeditious manner possible. We will issue your refund of FICA plus IRS interest as soon as we receive it from the IRS and are able to verify the amounts and calculations.
Will I have to pay income tax on my refund?
Refunds of FICA tax are not considered taxable income, however the interest that is paid to you is taxable in the year in which it is received.
Why do medical residents have to sign consents?
The Hospitals are required to attempt to notify all residents for which the Hospitals have withheld FICA taxes during the relevant years. Each resident has the option to allow the Hospitals to request the resident’s refunds on behalf of the resident. A resident may decline to consent.
How much can I expect to receive?
The refunds should be approximately 7.65% of your earnings from the medical residency program.
Why would a resident decline to consent to allow the Hospitals to request the resident’s refund on the resident’s behalf?
If a refund of FICA tax is made to the resident, an adjustment is made to reduce the cumulative earnings that are used to calculate social security benefits when retirement approaches. Although this is not likely to be a significant amount, it remains to be a choice for the resident to make.
Another reason is that some residents may have already filed a refund request on their own behalf and declining to consent would be a correct way to avoid making a second request.
What do the Hospitals expect to gain from this?
The Hospitals match dollar for dollar all FICA withheld from residents and employees wages. Over many years, this can be a substantial amount. Accordingly, the Hospitals would like to have their money refunded also. It’s important to note that any refunds that the Hospitals may receive have no impact on the amount a resident receives (whether they consent or not), and it does not affect a resident’s cumulative earnings for the calculation of future social security benefits.
The Hospitals do not receive any fee, commission, or other benefit by assisting with the residents’ refunds.
Who can I contact if I have other questions?
You may call Premier Health Partners at (937) 499-8805 or send an email to email@example.com.
You may send mail to:
Premier Health Partners
Finance - Medical Residents FICA
40 West Fourth Street, Suite 2110
Dayton, OH 45402-9547
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