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1.
Does your city pay a differential to veterans deployed on military leave?
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City
of Cookeville
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No
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City
of Millington
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Yes
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City
of Germantown
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No
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City
of Gatlinburg
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Yes
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City
of Oak Ridge
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Yes
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City
of Brentwood
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Yes
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City
of Chattanooga
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Yes
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City
of Crossville
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No
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City
of Lebanon
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Yes
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City
of Jackson
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Yes
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City
of Gallatin
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Yes
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City
of Alcoa
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No
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Are
you aware of the IRS implications of such payments?
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City
of Cookeville
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Yes
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City
of Millington
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Yes
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City
of Gatlinburg
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Yes
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City
of Oak Ridge
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Yes
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City
of Brentwood
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Yes
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City
of Chattanooga
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Yes
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City
of Lebanon
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Yes
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City
of Jackson
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Yes
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City
of Gallatin
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Yes
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City
of Alcoa
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N/A
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2.
Have you changed how you pay veterans on military leave?
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City
of Cookeville
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No
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City
of Millington
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No
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City
of Germantown
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No
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City
of Gatlinburg
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Yes
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City
of Oak Ridge
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Yes
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City
of Brentwood
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Yes
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City
of Chattanooga
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No
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City
of Lebanon
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No
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City
of Jackson
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Yes
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City
of Gallatin
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No
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City
of Alcoa
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N/A
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3. If
yes, what are you doing differently?
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City
of Millington
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Have
contacted the IRS about how to handle this situation -- was on
hold on the telephone for one hour being transferred from department
to department – bottom line – the people I talked to had no idea
that this was "on the books". They had no advice for
me; they have been told, according to the source I spoke with
that if anyone asks about this, the IRS person is supposed to
report it to a certain contact person! Now, we’ve done nothing
due to not knowing what to do and not having any advice from the
IRS!
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City
of Gatlinburg
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We
are processing the differential pay through Accounts Payable
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City
of Oak Ridge
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We
are giving them the full amount with no deductions. We refunded
all withholding items to them and will be issuing 1099 forms.
TCRS did not agree with the IRS ruling but said they would do
what the City wanted. We had adjusted our TCRS payment for the
amounts we had paid when we were treating the military differential
pay as earnings
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City
of Brentwood
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Not
withholding FICA deductions and Medicare on the supplemental pay.
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City
of Jackson
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I've
spoken with our IS Dept. and they have recommended that we pay
the supplement via Accounts Payable and issue a 1099 for 2005.
The IRS exempts FICA; however, through AP, no Income Taxes will
be deducted as well. We will no longer be able to issue direct
deposit; all will be in a check on the 15 and 30 of each month,
not the same as regular payroll.
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City
of Gallatin
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Finance
is still reviewing this. We intend to comply with the IRS regs.
We have one affected employee and hope to adjust everything accordingly
by year-end. How to change ADP’s computer system to accommodate
one employee is a problem.
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City
of Chattanooga
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We're
going to continue to pay them as we have, and withhold FIT, FICA,
and Medicare, and continue to contribute to their pensions. I
let Donna about this late Friday. The City Attorney feels that
we've made a good argument for what we're doing. Mike Hicks said
a Revenue Ruling is only binding on the IRS, not the taxpayer,
we should be OK there. There are several companies, which are
going to continue this practice as well. If there are any employees
who wish to file Form 843 with the IRS, we will write them a letter
to certify we are not going to seek return of the employment taxes.
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4. If
no,
a.
Are you reimbursing the veteran for FICA deductions on the differential
pay?
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City
of Millington
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No
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City
of Germantown
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No
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City
of Oak Ridge
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Yes
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City
of Chattanooga
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No
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City
of Lebanon
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No
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City
of Gallatin
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No
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City
of Cookeville
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N/A
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City
of Athens
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N/A
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City
of Gatlinburg
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N/A
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City
of Brentwood
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N/A
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City
of Crossville
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N/A
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City
of Jackson
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N/A
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City
of Alcoa
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N/A
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b.
Are
you reimbursing the veteran for income taxes withheld on the differential
pay?
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City
of Millington
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No
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City
of Germantown
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No
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City
of Oak Ridge
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Yes
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City
of Chattanooga
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No
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City
of Lebanon
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No
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City
of Gallatin
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No
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City
of Cookeville
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N/A
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City
of Athens
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N/A
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City
of Gatlinburg
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N/A
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City
of Brentwood
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N/A
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City
of Crossville
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N/A
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City
of Jackson
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N/A
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City
of Alcoa
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N/A
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Respondents:
Michael
Davidson, City of Cookeville
Margaret
Riding, City of Millington
Pat
McConnell, City of Germantown
Rita
Brown, City of Athens
Janet
Curry, City of Gatlinburg
Penelope
Sissom, City of Oak Ridge
Kirk
Bednar, City of Brentwood
Brian
Smart/Donna Kelley, City of Chattanooga
Sandra
Gruber, City of Crossville
Jim
Henderson, City of Lebanon
Lynn
Henning, City of Jackson
David
Crawford, City of Gallatin
William
Brown, City of Alcoa
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