Disabled workers in entertainment industry penalized for residuals

From David Robb at Hollywood Today:

HOLLYWOOD, Calif. -— It’s hard enough being disabled in Hollywood. A veteran TV writer, crippled by a major stroke, can’t get his fingers to type out a simple sentence. A well-known director, suffering from Alzheimer’s, 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 are entitled to a tax break that very few of them are receiving. In fact, most of their accountants don’t even seem to know it exists.

The exemption, which is codified on page 32 of the Internal Revenue Service’s “Employer’s Tax Guide” (Circular E) – Rule 15 – states that workers who are disabled and are “entitled to disability insurance benefits under the Social Security Act” are “EXEMPT” from paying Social Security and Medicare tax on earnings “if the worker did not perform any service for employer during period for which payment is made.”

Simply put, that means that Social Security and Medicare taxes (formerly known as FICA) should not be deducted from their residuals checks.

Unfortunately, hundreds of disabled actors, stunt performers, writers and directors are routinely missing out on this tax break.

I recently spoke to 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. That’s $11.47 that was deducted from a single residuals check that shouldn’t have been withheld.

Coulter, who was once one of Hollywood’s top stuntwomen, worked on hundreds of TV shows, including numerous episodes of “Charlie’s 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, she’s 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. That’s over $1,000 in taxes that she paid but wasn’t 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.

Former stuntwoman Leslie Hoffman has been leading the crusade to get these tax breaks for Hollywood’s disable community. Hoffman, who is disabled herself, has been trying to get the Screen Actors Guild and the SAG Pension & Health Plan to notify residuals providers of all SAG members who are receiving Social Security Disability, and to inform the providers of the law so that they will stop making these improper deductions.



“That’s a lot of money that we paid in over the last 24 years,” Coulter said. “Every year, I looked at the taxes and asked myself ‘why were we paying that?’ But I then thought the accountants know best and SAG is watching over our checks. It took a brain like Leslie Hoffman to question that.”

Currently, the only way a disable performer, writer or director can get this tax break – one that he or she is legally entitled to – is to call each and every residuals provider and inform them of their disability status. That means that each disabled person has to call the residuals departments at all major studios and payroll houses – including Entertainment Partners, FPS Film Payroll, Cast & Crew, Talent Partners, Paramount Pictures, Warner Bros., Disney, Fox, NBC/Universal, MGM/UA and Sony Pictures – and try to convince them to stop making these improper deductions.

Hoffman says that Sony Pictures Entertainment’s residuals department is one of the few in town that won’t put up an argument, and if the disabled person provides the studio with proof that he or she is receiving Social Security Disability insurance, SPE will stop making the deductions from their residuals checks.

Not everyone is as cooperative as Sony. NBC/Universal’s residuals department doesn’t even recognize the exemption, and has adamantly refused to stop deducting Social Security and Medicare taxes from Leslie Hoffman’s residuals.

Calling all these numerous residuals providers can be a daunting chore for someone suffering from a stroke or Alzheimer’s disease – and chances are, they don’t even know they’re entitled to the exemption.

Hoffman maintains that the various guild pension and health plans – those at SAG, AFTRA the Writers Guild and the Directors Guild – all have on record which of their participants are receiving Social Security Disability insurance, and that it is the guilds’ duty to notify all the different residuals providers of this fact and to inform them of the law so that they will stop making improper deductions.

“It would be so easy for the SAG and the SAG residuals department to fix this,” she said.

But as far as Hoffman’s concerned, SAG seems to have its own disability – her requests have fallen on deaf ears.