STATUS UPDATE – March 5, 2014

Mount Sinai recently received FICA refunds and statutory interest from the IRS for Q4 1997, Q4 1998, Q4 1999, and Q4 2001. The IRS also paid additional interest for Q3 1995, Q1 1996, Q2 1996, Q4 1996, Q1 1997, Q2 1997, Q3 1997, Q1 1998, Q2 1998, Q3 1998, Q1 1999, Q2 1999, Q3 1999, and Q1 2001 through Q1 2005. These funds will be distributed to the eligible individuals by Friday, March 7.

The IRS has not provided a timeframe regarding refunds and statutory interest for Q1 2000, Q2 2000, Q3 2000, and Q4 2000. We will post any relevant information as it becomes available. Please continue to monitor this site for further updates.

STATUS UPDATE - February 6, 2013

In December 2012, Mount Sinai distributed all medical resident FICA refunds received from the IRS. Accordingly, in January 2013, Mount Sinai also mailed Form 1099-INT to all individuals who received $600 or more in interest for 2012. Mount Sinai is still waiting for the IRS to release the following eight periods: Q4 1997, Q4 1998, Q4 1999, Q1 2000, Q2 2000, Q3 2000, Q4 2000 and Q4 2001

Upon receipt of the remaining refund checks from the IRS, Mount Sinai will prepare and mail checks to the individuals that provided their consent to receive refunds for these periods. Forms 1099-INT for refunds mailed in 2013 will be mailed to the appropriate individuals in January 2014.

We will provide updates as to the status of the claims on this website as we receive additional information from the IRS. Please be sure to check the website occasionally to monitor the status. Please also update us if your contact information changes.

STATUS UPDATE - September 14, 2012

Mount Sinai received written confirmation from the IRS that the medical resident FICA refund claim has been approved.  The claim will now move to the interest processing phase.   The IRS provided an estimated timeline of 8 to 12 weeks before refund checks will be mailed to Mount Sinai.  However, based on observations of other refund claims, we do not believe the 8 to 12 week timeline is realistic.

Upon receipt of the refund checks, Mount Sinai will prepare and mail checks to the individuals that provided their consent to receive the refunds.

We will provide updates as to the status of the claims on this website as we receive additional information from the IRS.  Please be sure to check the website occasionally to monitor the status.  Please also update us if your contact information changes.

STATUS UPDATE - June 4, 2012

We still do not have an estimate of when the refunds will be issued and have not heard from the IRS. We will post another update once we hear from the IRS. Please check the website periodically.

STATUS UPDATE - April 2, 2012

Recently, the IRS has followed up on Mount Sinai's refund claim with several questions. We have responded to those questions and we are again waiting for the IRS to take some action. We still do not have an estimate of when the refunds will be issued but expect to hear from the IRS by May 31, 2012. We will post another update once we hear from the IRS. Please check the website periodically.

Status Update - January 13, 2011

Mount Sinai filed the medical resident FICA (Social Security and Medicare) refund claim for the period1995 through March 31, 2005 with the IRS on December 17, 2010. Although the IRS has not provided a specific timeframe for its review, we estimate that it will take 6 to 18 months for the IRS to process these claims and issue refunds plus statutory interest. If you timely filed your consent form, we will contact you once Mount Sinai receives funds applicable to your refund claim.

Please check this website periodically for additional status updates.

Medical Resident FICA Refund Process

Background
Under federal tax rules, employers must withhold FICA taxes from wages paid to employees as well as paying an equivalent employer tax. However, the IRS provides that services performed by students are exempt from “employment” for this purpose and, therefore, amounts paid to them are not subject to the FICA tax. Several years ago, a United States Court of Appeals decision determined that stipends paid to University of Minnesota medical residents were not subject to FICA tax as a result of the student exception. Following that decision, many institutions, including The Mount Sinai Hospital (“Mt. Sinai”), filed Medical Resident FICA Tax Refund Claims (or MR Claims) requesting refunds of FICA taxes paid in previous years. Due to controversy surrounding these regulations and resulting litigation, the MR Claims were held in suspense by the IRS and were not paid.

On March 2, 2010, the IRS announced it would honor the MR claims for tax periods ending before April 1, 2005. This new IRS Global Settlement Initiative (the “Program”) will be handled under an IRS administrative process.

Mt. Sinai filed initial refund claims with the IRS of FICA taxes paid since January 1, 1995 on compensation earned for services performed by medical residents. The process described herein does not apply to tax periods after April 1, 2005 because those periods are still being litigated. Please note the IRS is currently reviewing whether the MR Claims relating to specific periods during 1995, 1996, 1998 and 2004 are eligible for refund. Mt. Sinai is working through this issue with the IRS and intends to submit information to the IRS for all time periods between 1995 and March 31, 2005. However, it is possible that the IRS will deny our MR Claim for some or all of the periods at issue.

Ernst & Young’s Role
Mt. Sinai has engaged Ernst & Young LLP (“EY”) to assist Mt. Sinai in pursuing the refunds for both itself and its residents and fellows who consent to be part of the refund process.

FICA Refund Amount
Resident refunds should be equal to the amount of eligible FICA taxes paid during the applicable calendar quarters (generally 7.65% of applicable wages) plus statutory interest. (To estimate your potential refund for a calendar year, please see calculator link provided below.) The amount of the refund may be reduced if a resident received annual wages above the Social Security wage base limit and/or a portion of the wages received were for non-medical resident services (e.g. moonlighting) during the same calendar year. Please refer to http://www.socialsecurity.gov/OACT/COLA/cbb.html for a chart listing the "Contribution and Benefit Base" (a.k.a., "wage base limit").

FICA Refund Process
After we file the documentation to support Mt. Sinai’s MR Claims, the IRS will verify the amount of the MR Claims and begin issuing refund checks, including statutory interest, to Mt. Sinai. Mt. Sinai cannot receive a refund of the FICA taxes that were withheld and paid on your behalf unless we have your written consent. If you do not consent to have Mt. Sinai obtain your refund, and have not previously filed your own claim, you may be precluded from receiving any refund of the FICA taxes withheld and paid on your behalf because the time period for filing an individual claim for refund with the IRS may have expired.

Impact of your FICA Refund on your Federal Taxes
If you consent and the IRS approves, Mt. Sinai will pay you your FICA tax refund, plus statutory interest, after the institution receives the refund from the IRS. The FICA tax portion of the refund is not taxable; however, the interest portion of the refund is taxable to you whether or not you receive a Form 1099-INT, Interest Income. (Mt. Sinai is required to file Form 1099-INT with the IRS and furnish a copy to you if they pay you interest of $600 or more in a calendar year. Mt. Sinai will not file Form 1099-INT with the IRS or furnish a copy to you if the interest portion is less than $600.)

In addition, Mt. Sinai will file Form W-2c, Corrected Wage and Tax Statement, with the Social Security Administration (SSA), and furnish a copy to you for each tax year for which you receive a refund of FICA taxes. In most cases, Form W-2c will show a reduction in your earnings for social security coverage purposes in an amount equal to all the wages you were paid for services performed as a medical resident.

Impact of your FICA Refund on your Social Security Benefits
Social security benefits are based on your earnings over your working lifetime and, therefore, a refund could reduce disability, survivors, or retirement benefits that you, or your family, are receiving or may seek to receive in the future. If you would like general information about the effect on your social security benefits, you should contact SSA directly at 1-800-772-1213.

Next Steps to Receive your FICA Refund
If you were a resident during the period January 1, 1995 through March 31, 2005 and consent to receive your share of the refund from Mt. Sinai, you must print, fully complete and sign the Employee Consent Form, which can be found by utilizing the link below, and return it to Mt. Sinai by regular mail (633 Third Avenue, 10th Floor, New York, NY 10017), fax (212-731-3042) or email (sign and scan form – email to Kevin.Farrell@mountsinai.org). The IRS has established a deadline for Mt. Sinai to file its refund claim; therefore, your signed consent form must be received no later than Monday, October 11, 2010. If for some reason you miss this deadline, please contact Mt. Sinai or E&Y immediately using the contact information below to determine if you can still be included in the refund claim.

Claims for periods after April 1, 2005
If you were a resident for any period after April 1, 2005 – This refund process does not apply for periods after April 1, 2005 because the IRS issued regulations effective on that date which specifically held that medical residents are not “students”. However, Mt. Sinai continues to file protective claims for such periods and has also filed a lawsuit seeking a refund for post April 2005 periods. If refunds become available for such periods, Mt. Sinai will pursue such refunds on behalf of residents, who will again be asked to consent to be a part of the refund process at that time. If you received no wages as a medical resident for a period prior to April 1, 2005, there is no need to complete a consent form at this time. However, please provide us with your current contact information so that we have it on file.

Refund Status Updates
Please continue to refer to this website for periodic updates on the refund process.

IRS Contact Information
If you have any questions, you may contact the IRS at 800-919-1703 or visit its website which provides more information and Questions & Answers. We recommend contacting your tax advisor for specific questions regarding your personal tax situation.

Please keep us updated with your contact information. Should your mailing address, phone number or email address change, please email these changes to Ernst & Young at MountSinai.FICArefunds@ey.com

If you wish to calculate your potential refund, please click here.

If you have a question about the process, please submit it to Ernst & Young LLP at MountSinai.FICArefunds@ey.com or call 877-800-3830 during the hours of 9am and 6pm EST, Monday through Friday. You can also contact Kevin Farrell of Mt. Sinai at Kevin.Farrell@mountsinai.org or 212-731-3050.