How do I exempt social security but still pay Medicare?

Thanks for sharing with us, @DE2020.

Currently, QuickBooks Online Payroll only allows to exempt employees from Social Security and Medicare, or none. In shorter terms, we're unable to only exempt the Employee for SS.

As per compliant with the IRS, both taxes come together (Social Security and Medicare). I'd suggest contacting IRS if that's possible to exempt for Social Security tax or consult a tax accountant.

Here's your reference on contacting the following tax agencies:

• Contact IRS
• https://www.irs.gov/
• Social SecurityAdministration

I'll add this page from the IRS as your reference for more details about Federal Tax: Publication 15 (2020), (Circular E), Employer's Tax Guide.

Please let me know if you need further assistance. I'll keep my notifications open. Keep safe and well!

Per https://www.irs.gov/government-entities/federal-state-local-governments/state-and-local-government-e...

Does mandatory Social Security coverage apply to the employee?
Full Social Security coverage (mandatory Social Security tax) was mandated beginning July 2, 1991, for state and local government employees who are not members of a qualifying public retirement system (FICA replacement plan) and who are not covered under a Section 218 Agreement, unless a specific exclusion applies under the law. A list of specific exclusions is included in Chapter 5: “Social Security and Medicare Coverage” of Publication 963.

Per Publication 963:

Employees With No Social Security Coverage

The final category of workers includes those who are not subject to any voluntary or mandatory social security coverage at all. This can only occur where the workers are covered by a qualifying public retirement system (“FICA replacement plan”) and are not covered by a Section 218 Agreement. Employers of these workers will not withhold social security taxes or show any “social security wages” on Form W-2; they are generally covered for Medicare. Public retirement systems are the subject of Chapter 6.

Texas teacher are covered by TRS, a qualifying public retirement system, and do not withhold social security taxes or show wages on W-2.  They are required to pay Medicare.

Hello DE2020,

I've researched a little bit about the tax part, but this is not an advice. From what I'm getting, you'll file Form 4029 to request for Social Security and Medicare exemption, which also applies to employees. However, I may have interpreted it differently, so I'll just provide insight about the option available in QuickBooks.

In QuickBooks Online Payroll, we're unable to separate the Medicare and SS portions. However, this can be achieved in QuickBooks Desktop since these taxes are chosen separately in the employee's payroll info.

Hope this clarifies the option offered in QuickBooks Online Payroll for these two taxes. 

Let me know if you have other payroll concerns.