The Internal Revenue Service says I may have misled some readers in the Dec. 17 item about federal workers who must pay Social Security taxes next year (by virtue of outside employement) as well as the Medicare tax that will come out of their U.S. salaries beginning in January. Starting next month, federal workers will have to pay 1.3 percent of salary -- on amounts up to $35,700 -- to cover the Medicare portion of Social Security.

In addition, federal workers who have outside, nonfederal jobs covered by Social Security will have to pay the full 6.7 percent Social Security tax on salaries up to $35,700.

IRS says "it is possible for a federal employe with outside employment and total earnings over $35,700 to get a partial refund of Medicare payments without paying to full Social Security tax." This is the example IRS uses:

A federal employe earns $20,000 from his government job and $19,000 from outside employment. His Medicare tax from his government jobs is $260. His total Social Security tax from his outside employment is $1,273. That means the employe has paid a total Social Security/Medicare tax of $1,533.

Even though the employe pays less than the full Social Security tax, IRS says, "the taxpayer is entitled to a credit of $42.90 since the maximum Medicare tax is equal to 1.3 percent x $35,700, or $464.10, and this taxpayer has paid 1.3 percent x $39,000, or $507, for the Medicare portion of Social Security tax."