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"since the SSA handbook does have a section that says a fee based person does not pay SE"
That's still backwards. That's not how it reads, and it's the opposite of this. This is confusing a Person with a Public official, and the Public official is a title/position that is easily and clearly identified. There is no "fee-based person" in this code or in this discussion. He can call himself an elephant, but that doesn't change anything.
You can be the maintenance worker, a landscape company operator, or the Mayor, and mow the lawn at the fairgrounds. One is the Public official. All three are Persons. All three would pay FICA, but one would pay it through their business. No one is fee-based, even though the lawn company gets paid per mowing and paid from the Fairgrounds funds, which is part of the County's Restricted funds.
He is either an employee subject to FICA, an employee participating in the public retirement plan and able to exclude SS, or self-employed and subject to SE taxes.
https://secure.ssa.gov/poms.nsf/lnx/1960001625
SL 60001.625 Fee-Based Public Officials
A fee-based public official is an individual who receives and retains remuneration directly from the public. An individual who receives payment for services from government funds in the form of a wage or salary is not a fee-based public official, even if the compensation is called a fee.
Reference: Social Security Ruling 92-4p (SSA adopted the IRS definition of a “fee.”)
Services in positions compensated solely by fees are excluded from coverage under Section 218 Agreements (unless the State specifically included these services) and are covered as self-employment and subject to SECA.
Generally, a position compensated by a salary and fees is considered a fee-basis position if the fees are the principal source of compensation, unless a State law provides that a position for which any salary is paid is not a fee-basis position. A State may exclude positions compensated by both salary and fees from Social Security and Medicare coverage under the State’s Section 218 Agreement. If the exclusion is taken, none of the compensation received, including the salary, is covered wages under the Section 218 Agreement. However, the salary payment, while excluded under the Agreement, is subject to mandatory Social Security if the official is not a member of a public retirement system.
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