Hollywood? Really? Yes, and the answers lead to other questions about SSDI--what about paperwork costs?[Editor's note: This is a follow-up to Colorado medi-pot issue splits SSDI from SSI; New Jersey voters nix mixing jobless, disability funds.] By Mike Hinshaw Beneath an eye-jangling, alarmist headline--Disabled Workers of the World Unite!--follows a Nov. 3 article from Hollywood Today that sheds light on a problem discussed very little outside its own industry. Probably more people are aware of health problems faced by professional athletes who played in eras before the current era of huge contracts and bonuses. David Robb writes:
Its hard enough being disabled in Hollywood. A veteran TV writer, crippled by a major stroke, cant get his fingers to type out a simple sentence. A well-known director, suffering from Alzheimers, is relegated to watching his old movies on TV, not recognizing any of the once-familiar faces. A former stuntwoman, crippled by arthritis, can barely make it to the kitchen without the aid of a walker. Making matters worse, each is being robbed of a portion of their hard-earned residuals -- and few people even know about it; fewer still even care. Disabled actors, stunt performers, writers and directors who are receiving Social Security Disability insurance [SSDI] are entitled to a tax break that very few of them are receiving. In fact, most of their accountants dont even seem to know it exists.
An overlooked exemptionRobb says the tax break comes in the form of an exemption that applies to disabled workers who are entitled to SSDI benefits do not have to pay taxes on Social Security or Medicare for earnings "if the worker did not perform any service for employer during period for which payment is made." He cites the supporting document as "page 32 of the Internal Revenue Services 'Employers Tax Guide' (Circular E) Rule 15." The .pdf file itself is not hard to find, but you can't do an easy internal search on the wording; you have to find page 32, then scroll to the seventh row of the table on that page. Now, conceivably, this could apply to other-than-Hollywood types--for instance, authors or others who receive royalties or other employment-related earnings in years other than the original years worked. But, from Hollywood Today's perspective, it specifically applies to actors, stunt personnel, and so forth who get receive residuals in years following those when the original work was performed. In any given year, the effect on residuals from a specific project (movie or TV show) may not add up to much.
Residuals can add up through the yearsHe gives the example of "former stuntwoman Jeannie Coulter, who has been receiving Social Security Disability insurance for nearly 25 years, and she told me that on the very day we spoke, she received a $150 residuals check from NBC/Universal that had $9.30 deducted for Social Security tax and $2.17 deducted for Medicare tax. Thats $11.47 that was deducted from a single residuals check that shouldnt have been withheld." And as Robb points out, this potentially affects a huge number of folks, including actors, writers, stunt performers, directors, and so on. He says hundreds, but when you think all the movies, all the TV shows--maybe even radio shows--and all the people who are entitled to their residuals, well, I'm no industry expert but it seems no stretch to say that thousands of former bit players and even aging former stars might be getting shortchanged in their twilight years. Here's how residuals--and the tax benefit--can add up, cumulatively, continuing with the example of merely one, top-tier stuntwoman:
Coulter, who was once one of Hollywoods top stuntwomen, worked on hundreds of TV shows, including numerous episodes of Charlies Angels. And every time one of her shows is re-run on TV, she gets a residuals check. And every time she gets a residuals check, shes improperly docked for Social Security and Medicare taxes. Last year, $211 was deducted from her residuals checks for Social Security and $49 for Medicare. In 2008, $251 was deducted for Social Security and $58 for Medicare. In 2007, $362 was deducted for Social Security and $85 for Medicare. Thats over $1,000 in taxes that she paid but wasnt supposed to over the last three years and this has been going on for the last 25 years. For Jeannie alone, the overpayment of taxes in the last 25 years comes to more than $8,000.It may seem frivolous, but who knows exactly how big the problem is? For instance, let's postulate only 50 former show-biz people getting shorted eight grand each. That's $400,000 they might use to band together and help each other. It's certainly worth some authority looking into. Now, on to another topic.