Just started school and started getting deposits through the hpsp program. I am looking at the statement on the mypay program and am confused on why I am not being taxed for medicare and social security. I am getting a federal tax of 25% and a state tax. (I should not be taxed by state -this is another error- as I am living outside of California. California does not tax military members while out of state. I talked to the franchize tax board about this several times. Either they were not aware of the law and confused by it, or there is also an error in the system for which I will need to have corrected as well.) Anyone have any experience on this?