Medicare Pickup on Pickup

Set up deduction codes and assign them to employees for Medicare Pickup on Pickup.

Set Up Deduction Code 8999

Set up deduction code 8999 for certified employees.

1. On the start page, select Human Resources. 

2. Select Reference Tables, then choose Deductions. 

3. Click Add new.

4. In the Deduction Code field, enter 8999 to ensure that the deduction record is added just before the Direct Deposit deduction records that begin with 9XXX.

5. Enter the Title, Check Title, and Frequency provided by the district. 

6. Verify the option to Maintain Arrears is not selected.

7. From the Method drop-down list, choose option M - % Plus Additional Amount.

8. From the Subjective Gross drop-down list, choose option SP - Subject Pay Gross.

9. Verify the Include in EAC "What If" Paycheck Calculator option is not selected.

10. Click the Employee tab and choose a Withholding Account.

11. Enter the Deduction Amount/Rate.

12. From the Maximum Method drop-down list, choose option F - Fiscal Year to Date.

13. From the Cafeteria Plan drop-down list, choose option P - Deduction is a Medicare pickup deduction.

14. Click the Employer tab. 

15. From the Benefit Method drop-down list, choose option M - % Plus Additional Amount.

16. Enter the Benefit Amount/Rate.

17. From the Benefit Charging drop-down list, choose option A - All Pay Rates.

18. Select a Benefit Account.

19. Click the Taxation tab and select the following options under Benefit Taxes:

    • Federal Tax

    • FICA Tax

    • State Tax 

20. Click the Vendor tab and select a Vendor.

21. Enter the Payment Frequency.

22. Click Accept.

For non-certified employees, set up deduction code 8998, following the same procedure. However, you must select a non-certified Benefit Account on the Employer tab.

For more information, refer to Deductions/Benefits.

Assign Medicare Pickup on Pickup Deductions

After creating deduction codes for Medicare Pickup on Pickup, you must assign the deductions to employees.

Unless there are unique requirements around the employee setup and employer obligations, one deduction code is sufficient for this calculation and can be assigned to all the employees.

1. Assign deduction code 8999 to certified employees and 8998 to non-certified employees. Refer to the Employee Deductions page and set up employee deduction records.

2. Do not enter values in the Additional Gross fields. The amount is automatically calculated.

3. Click Accept.

4. Deactivate the old Medicare Pickup on Pickup deduction codes for these employees.

   • Retain this data for year-end reporting.

Set up No Medicare Local taxes for Medicare-exempt employees

For employees who have local work taxes and are subject to Medicare wages but do not owe Medicare taxes, enter Y in the No Medicare field on the Payroll Information - State Required page.