Social Security and Medicare Taxes: Who is Subject?

Social Security and Medicare Taxes are taken out of our paychecks “because they have to.”

But do they?

This is from the Treasury Financial Manual (TFM), the Department of the Treasury’s “official publication for financial accounting and reporting of all receipts and disbursements of the Federal Government. Treasury’s Financial Management Service (FMS) issues the TFM to provide policies, procedures, and instructions for Federal departments and agencies, Federal Reserve Banks (FRBs), and other concerned parties to follow in carrying out their fiscal responsibilities.” (link)

4030.20—Employees Subject to Social Security and Medicare Taxes

Both Social Security and Medicare taxes are imposed on the following groups:

All Federal employees hired on or after January 1, 1984, including those with previous Federal service who have experienced a break in Federal service of 366 or more days.

All legislative branch employees not participating in the CSRS as of December 31, 1983.

All members of Congress, the President, and the Vice President.

All sitting Federal judges, executive level and noncareer appointees in the Senior Executive Service, and noncareer members of the Senior Foreign Service. (link)

Which one are you?


13 Responses to “Social Security and Medicare Taxes: Who is Subject?”

    19 February 2010 at 23:52

    Sorry, old fellow. Nice try; but you failed to notice that Section 4030, from which you took your information and hope, is contained in Part 3 of Chapter 1 of the TFM. Chapter 1 deals only with rules applying to Federal Agencies. I suppose by a stretch you could say we are all employees of the federal government, but I don’t care to say so of my own free will. Perhaps some companies that are now ‘owned’ by the federal government, could take the position that their employees being federal employees not on the list in Section 4030 are exempt from paying FICA taxes, but that is their battle to fight.

    On a related topic Judicial Watch filed for documents related to Fannie Mae and Freddie Mac under the FOIA, but have been denied access to those documents on the basis that the documents being requested were published when Fannie and Freddie were GSEs (government supported enterprises). So I wonder if the employees of Fannie and Freddie prior to the complete government takeover of those un- organizations were subject to FICA deductions ? And even if they were before, as stated, are they now ?

    We can’t expect the American People to jump from Capitalism to Communism…but we can assist their elected leaders in giving them small doses of Socialism, until they awaken one day to find that they have Communism. — Nikita Khrushchev (1894-1971)

  2. 20 February 2010 at 04:40

    @Rough Justice: This is exactly the issue.

    In one breath you discount what I say because of the Chapter it is in… but in the next breath you allude that we are employees of the government but not out of free will.

    With this said, you seem to know what I know…

  3. 3 Alan Scott
    20 February 2010 at 18:11

    I have calculated that with my federal tax refund, I will have paid 7 times the amount in SS and Medicare taxes, than I did in federal income taxes. So at least with me, I am supporting two bankrupt entitlement black holes . And our fearless leader wants to add another entitlement called obama-care to things that we can’t afford.

  4. 22 February 2010 at 07:11

    @Alan Scott: So what are you going to do about it?

  5. 22 February 2010 at 07:12

    @Rough Justice: BTW, that is a good quote by Khrushchev.

  6. 6 Alan Scott
    22 February 2010 at 17:38


    ” So what are you going to do about it?”

    What I always do. Vote against the people who are bankrupting us. Giving money to candidates who support my views. Argue with friends and relatives who believe that they are entitled to entitlements. That would be a large % of my relatives and a smaller portion of my friends.

  7. 22 February 2010 at 22:05

    @Alan Scott: I am not sure I understand. How is “voting against people” who bankrupt us and talking to friends/family going to change the fact of you paying Social Security and Medicare?

  8. 8 Alan Scott
    24 February 2010 at 18:51


    What exactly would you have me do ? The SS and Medicare come off of my paycheck automatically. I am not aware that I have an option to stop that .

  9. 25 February 2010 at 23:52

    @Alan Scott: Indeed they do. So if you have the natural right to labor… and your government has the right to take what it feels it needs… then you must have ceded them that power sometime.


    If you still think that your government can just take whatever it wants (what difference does it make if it is 5% or 10% or for Medicare+SS+ObamaCare?)… then you not truly free, are you?

  10. 10 Alan Scott
    2 March 2010 at 20:58


    I am sorry, but you are getting too abstract for me . Of course I am not truly free . It is not just the government that puts chains on you . I know where the lines are all drawn and what is possible . Other than politically fighting against the big government agendas, I don’t recognize other options .

  11. 11 Al
    11 June 2012 at 19:36

    If you are willing to order your life around not paying FICA/SECA and Medicare taxes, like eat out of dumpsters and live under a bridge, you may be able to make it. Your wife will divorce you and your children will think you have gone totally nutzo.
    If you do not work for anyone but your clients and customers, doing something like flea markets, mowing yards, painting houses, you may be able to make a living and if you are able to bring in enough money, maybe your wife will not divorce you.

  12. 11 June 2012 at 19:47

    @Al, if we just discussed how nobody needs a SSN… by the SSA’s own admission… and FICA/SECA/Medicare is collected from those only with a “membership number” (a SSN) then why are you suggesting that we have to eat out of a dumpster and have our family abandon us to follow the law?

    I’d be interested to under what part of 4030.20 do you fall under to allow such taxes to be collected?

  13. 13 Al
    23 October 2012 at 11:37

    4030.20 is not a covers-all, any more than the Social Security Act, which does not require anyone to have a SS# to live or work in the “United States,” covers all. Other legal requirements make it almost impossible for one to live as a fairly normal American without having or using a SS#.
    That the SSA does not require a SS# does not mean that there is no law that requires, or essentialy requires, one to have a SS# to live or work in the US.

    An IRS response to a letter I sent a Congressman years ago defined “voluntary” essentially as not having a loaded, cocked gun pressed against one’s temple. The IRS’ dictionary apparently is quite different from any common or law dictionary. It reflects what IRS agents mean by the words they use.

    If you do not have or decline to provide a SS# few will hire you or exchange with you, especially on a consistent basis, and those who will pay only a bottom-end compensation, usually called “under the table” (free market).

    Generally, if you do not have or decline to provide a SS#, you will not get:

    Driver license (driving without one is an entire legal war in itself)

    Bank account – you may obtain access to an account but someone will have to provide a 9 digit number

    Marriage license – without government marriage registration you will be regarded as “living together,” what used to be called “shacking up.” Your surviving spouse will not inherit your estate as a surviving spouse. Maybe you don’t care.

    Business and professional licenses – doing “business” or engagin in a “profession” without license will subject you to arrest, civil fines, confiscation of business assets . . .

    I managed to survive for about 20 years without divulging a SS# to anyone for anything. I had assets and receivables that allowed me to do so. However, those assets had been accumulated while a SS# was in use. One who inherits an estate and is thereby “independently wealthy” or even “independently poor,” able to get by, may be able to avoid divulging a SS#, at least following the settlement. Mowing lawns for old ladies, cleaning gutters, making and selling art, collecting deposit drink cans and bottles, panhandling and such like may allow one to extend his non-SS# lifestyle to age 99, saving as much assets as possible toward the time when he cannot do anything remunerative.

    Everyone I have known who did without using a SS# started out with assets that had been built up or inherited while a SS# was in use.

    One I know lives off his SS#ed wife’s job pay and assets he accumulated years earlier. He gets SS#ed people to act as trustees who can give THEIR SS# to get permits, licenses and such like so he can pretend to be an independent non-SS#er.

    Another lives off people who comply, good SS#ed folks who sympathize with him. He and his family live in old truck campers, school buses and “illegal” (unregistered, untaxed, mobile homes that are not connected to public utilities or are illegally bootlegged to titled, deeded, registered and taxed houses) accommodations.

    Another lived in a house that was purchased out of the settlement of an estate and therefore has no liens or encumbrances. He never recorded the deed. He pays property taxes under the name of the previous owner, who is now deceased. He found itinerant work to pay for running expenses. He is now deceased. I do not know what his widow has done.

    Another lived off a military disability pension and sells “seminar” admissions and books. Now deceased (2011).

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