The State of Minnesota will pay eligible employees for the difference between military pay and what the employee would have received if their state employment had not been interrupted by military service.
The payment is calculated by comparing your gross monthly earnings paid by the state against your base pay in active military service. If the State amount is larger than the military base pay amount, the difference between the two will be paid by the State. To determine if you may qualify for a salary differential payment from the State, use the Worksheet for Computing Pay Difference Between State and Military Base Pay. To find this worksheet, visit the Forms – Payroll page and select Military.
Employees who are eligible for a salary differential payment must submit all military pay advices to their employer in order to receive the payment. You may do this yourself or through your power of attorney. Payments will be processed on a regular pay period basis. The amount of the differential payment will be adjusted accordingly whenever either the military pay or state pay changes.
Additionally, if you are a member of the nonmilitary reserve component of the uniformed services of the U.S. who took properly authorized leave from state employment under substantially comparable federal or state authority ordering you to report for federal or state active service, you may apply for a salary differential.
Examples of the nonmilitary reserve component of the uniformed services include service for the commissioned corps of the Public Health Service and any other category of persons designated by the president in time of war or emergency. If you haven't been compensated previously for this pay since May 29th, 2003, you may apply for the salary differential benefits prior to, during, or following your active service on or after May 29, 2003. Payment of the salary differential is not authorized for basic training, advanced individual training, annual training, and periodic inactive duty training.
Military salary differential pay received in calendar year 2009 and beyond is considered wages and will be:
- Reported on Form W-2 rather than Form 1099 as in past years;
- Subject to Federal tax withholding;
- Subject to State tax withholding;
- Subject to retirement;
- Subject to other deductions, including parking, union, charity, savings plans (deferred compensation/TSA) unless you submit a request to the appropriate office(s) to end the deduction before the military differential is processed for payment; and
- Excluded from FICA/Medicare taxation.