I.R.C. § 1401(a) Old-Age, Survivors, And Disability Insurance —
In addition to other taxes, there shall be imposed for each taxable year, on the
self-employment income of every individual, a tax equal to 12.4 percent of the amount
of the self-employment income for such taxable year.
I.R.C. § 1401(b) Hospital Insurance
I.R.C. § 1401(b)(1) In General —
In addition to the tax imposed by the preceding subsection, there shall be imposed
for each taxable year, on the self-employment income of every individual, a tax equal
to 2.9 percent of the amount of the self-employment income for such taxable year.
I.R.C. § 1401(b)(2) Additional Tax
I.R.C. § 1401(b)(2)(A) In General —
In addition to the tax imposed by paragraph (1) and the preceding subsection, there
is hereby imposed on every taxpayer (other than a corporation, estate, or trust) for
each taxable year beginning after December 31, 2012, a tax equal to 0.9 percent of
the self-employment income for such taxable year which is in excess of—
I.R.C. § 1401(b)(2)(A)(i) —
in the case of a joint return, $250,000,
I.R.C. § 1401(b)(2)(A)(ii) —
in the case of a married taxpayer (as defined in section 7703)
filing a separate return, 1/2 of the dollar amount determined under clause (i), and
I.R.C. § 1401(b)(2)(A)(iii) —
in any other case, $200,000.
I.R.C. § 1401(b)(2)(B) Coordination With FICA —
The amounts under clause (i), (ii), or (iii) (whichever is applicable) of subparagraph
(A) shall be reduced (but not below zero) by the amount of wages taken into account
in determining the tax imposed under section 3121(b)(2) with respect to the taxpayer.
I.R.C. § 1401(c) Relief From Taxes In Cases Covered By Certain International Agreements —
During any period in which there is in effect an agreement entered into pursuant
to section 233 of the Social Security Act with any foreign country, the self-employment income
of an individual shall be exempt from the taxes imposed by this section to the extent
that such self-employment income is subject under such agreement exclusively to
the laws applicable to the
social security system of such foreign country.
(Aug. 16, 1954, ch. 736, 68A Stat. 353; Sept. 1, 1954,
ch. 1206, title II, Sec. 208(a), 68 Stat. 1093; Aug. 1, 1956, ch. 836, title II,
Sec. 202(a), 70 Stat. 845; Aug. 28, 1958, Pub. L. 85-840, title IV, Sec. 401(a), 72 Stat. 1041; June 30, 1961, Pub. L. 87-64, title II, Sec. 201(a), 75 Stat. 140; July 30, 1965, Pub. L. 89-97, title I, Sec. 111(c)(4), title III, Sec. 321(a), 79 Stat. 342, 394;
Jan. 2, 1968, Pub. L. 90-248, title I, Sec. 109(a)(1), (b)(1), 81 Stat. 835, 836; July 1, 1972, Pub. L. 92-336, title II, Sec. 204
(a)(1), (b)(1), 86 Stat. 420, 421; Oct. 30, 1972, Pub. L. 92-603, title I, Sec. 135(a)(1),
(b)(1), 86 Stat. 1362, 1363; Dec. 31, 1973, Pub. L. 93-233, Sec. 6(b)(1), 87 Stat. 955; Oct. 4, 1976, Pub. L. 94-455, title XIX, Sec. 1901(a)(154), 90 Stat. 1789;
Dec. 20, 1977, Pub. L. 95-216, title I, Sec. 101(a)(3), (b)(3), title III, Sec. 317(b)(1), 91 Stat. 1511, 1512,
1539; Apr. 20, 1983, Pub.
L. 98-21, title I, Sec. 124(a), (b), 97 Stat. 89;
Nov. 5, 1990, Pub. L. 101-508, title XI, Sec. 11801(a)(36), (c)(16), 104 Stat. 1388-521, 1388-527;
Mar. 2, 2004, Pub. L. 108-203,
Sec. 415, 118 Stat. 493; Pub. L. 111-148, Sec. 9015(b)(1), 10906(b), Mar. 23, 2010, 124 Stat. 119; Pub. L. 111-152, Sec. 1402(b)(1)(B), Mar. 30, 2010, 124 Stat. 1029; Pub. L. 113-295, Div. A, title II, sec. 221(a)(89), 221(a)(90), Dec. 19, 2014, 128 Stat. 4010.)
BACKGROUND NOTES
AMENDMENTS
2014 - Subsec. (a). Pub. L. 113-295, Div. A, Sec. 221(a)(89), amended subsec. (a) by substituting “12.4 percent of the
amount of the self-employment income for such taxable year.” for “the
following percent of the amount of the self-employment income for such taxable year:
In the case of a taxable year
Beginning after And before: Percent:
December 31, 1983.........January 1, 1988................11.40
December 31, 1987.........January 1, 1990................12.12
December 31, 1989........................................12.40”
Subsec. (b)(1). Pub. L. 113-295, Div A, Sec. 221(a)(90), amended par.
(1) by substituting “2.9 percent of the amount of the self-employment income for such
taxable year.” for “the following percent of the amount of the self-employment income
for such taxable year:
In the case of a taxable year
Beginning after: And before: Percent:
December 31, 1983..........January 1, 1985................2.60
December 31, 1984..........January 1, 1986................2.70
December 31, 1985.........................................2.90”
2010 - Subsec. (b)(2)(A)(i)-(iii). Pub. L. 111-152, Sec. 1402(b)(1)(B)(i), amended subpar. (A) by striking “and” at the end of clause
(i), by redesignating clause (ii) as clause (iii), and by adding clause
(ii).
Subsec. (b)(2)(B). Pub. L. 111-152, Sec. 1402(b)(1)(B)(ii), amended subpar. (B) by substituting “under clause (i), (ii), or (iii) (whichever
is applicable)” for “under clauses
(i) and (ii)”.
Subsec. (b). Pub. L. 111-148, Sec. 9015(b)(1), amended subsec. (b) by substituting “(1) In General.—In addition”
for “In addition”, and by adding par. (2).
Subsec. (b)(2). Pub. L. 111-148, Sec. 10906(b), amended par. (2) by substituting “0.9 percent” for “0.5 percent”.
2004 - Subsec. (c). Pub. L. 108-203, Sec. 415, amended subsec. (c) by substituting
“exclusively to the laws applicable to” for “to taxes or contributions for similar
purposes under” after “under such agreement”.
1990 - Subsecs. (c), (d). Pub. L. 101-508 redesignated subsec.
(d) as (c) and struck out former subsec. (c) which provided a credit against self-employment
taxes imposed by this section.
1983 - Subsec. (a). Pub. L. 98-21, Sec. 124(a), amended subsec. (a) generally, substituting a table for former pars.
(1) to (7) which had imposed a tax on the self-employment income of every individual
(1) in the case of any taxable year beginning before Jan. 1, 1978, to be equal to
7.0 percent of the amount of the self-employment income for such taxable year; (2)
in the case of any taxable year beginning after Dec. 31, 1977, and before Jan. 1,
1979, to be equal to 7.10 percent of the amount of the self-employment income for
such taxable year; (3) in the case of any taxable year beginning after Dec. 31, 1978,
and before Jan. 1, 1981, to be equal to 7.05 percent of the amount of the self-employment
income for such taxable year;
(4) in the case of any taxable year beginning after Dec. 31, 1980, and before Jan.
1, 1982, to be equal to 8.00 percent of the amount of the self-employment income for
such taxable year; (5) in the case of any taxable year beginning after Dec. 31, 1981,
and before Jan. 1, 1985, to be equal to 8.05 percent of the amount of the self-employment
income for such taxable year; (6) in the case of any taxable year beginning after
Dec. 31, 1984, and before Jan. 1, 1990, to be equal to 8.55 percent of the amount
of the self-employment income for such taxable year; and (7) in the case of any taxable
year beginning after Dec. 31, 1989, to be equal to 9.30 percent of the amount of the
self-employment income for such taxable year.
Subsec. (b). Pub. L. 98-21, Sec. 124(a), amended subsec. (b) generally, substituting a table for former pars. (1) to (6)
which had imposed a tax on the self-employment income of every individual (1) in the
case of any taxable year beginning after Dec. 31, 1973, and before Jan. 1, 1978, to
be equal to 0.90 percent of the amount of the self-employment income for such taxable
year; (2) in the case of any taxable year beginning after Dec. 31, 1977, and before
Jan. 1, 1979, to be equal to 1.00 percent of the amount of the self-employment income
for such taxable year; (3) in the case of any taxable year beginning after Dec. 31,
1978, and before Jan. 1, 1981, to be equal to 1.05 percent of the amount of the self-employment
income for such taxable year;
(4) in the case of any taxable year beginning after Dec. 31, 1980, and before Jan.
1, 1985, to be equal to 1.30 percent of the amount of the self-employment income for
such taxable year; (5) in the case of any taxable year beginning after Dec. 31, 1984,
and before Jan. 1, 1986, to be equal to 1.35 percent of the amount of the self-employment
income for such taxable year; and (6) in the case of any taxable year beginning after
Dec. 31, 1985, to be equal to 1.45 percent of the amount of the self-employment income
for such taxable year.
Subsecs. (c), (d). Pub. L. 98-21, Sec. 124(b), added subsec. (c) and redesignated former subsec. (c) as (d).
1977 - Subsec. (a). Pub. L. 95-216, Sec. 101(a)(3), substituted provisions calling for a graduated increase in the tax from 7.0 percent
for taxable years beginning before Jan. 1, 1978, to 9.30 percent for taxable years
beginning after Dec. 31, 1989, for provisions under which the tax had been set at
7.0 percent without any increase in the rate in future years.
Subsec. (b). Pub. L. 95-216, Sec. 101(b)(3), substituted ‘after December 31, 1977, and before January 1, 1979’ for ‘after December
31, 1977, and before January 1, 1981’ and ‘1.00 percent’ for ‘1.10 percent’
in par. (2), substituted ‘after December 31, 1978, and before January 1, 1981’ for
‘after December 31, 1980, and before January 1, 1986’
and ‘1.05 percent’ for ‘1.35 percent’ in par. (3), substituted ‘after December 31,
1980, and before January 1, 1985’ for ‘after December 31, 1985’ and ‘1.30 percent’
for ‘1.50 percent’ in par. (4), and added pars. (5) and (6).
Subsec. (c). Pub. L. 95-216, Sec. 317(b)(1), added subsec. (c).
1976 - Subsec. (a). Pub. L. 94-455, Sec. 1901(a)(154)(A), among other changes, substituted provisions relating to a uniform tax rate of 7
percent on self-employment income of every individual for provisions relating to varied
tax rate of 5.8 percent of the amount of self-employment income for any taxable year
beginning after Dec. 31, 1967, and before Jan. 1, 1969, 6.3 percent for any taxable
year beginning after Dec. 31, 1968, and before Jan. 1, 1971, 6.9 percent for any taxable
year beginning after Dec. 31, 1970, and before Jan. 1, 1973, and 7.0 percent for any
taxable year beginning after Dec. 31, 1972.
Subsec. (b). Pub. L. 94-455, Sec. 1901(a)(154)(B), redesignated pars. (3) to (6) as (1) to (4). Former pars. (1) and
(2), which related to a 6 percent tax rate on self-employment income for any taxable
year beginning after Dec. 31, 1967, and before Jan. 1, 1974, and 1 percent tax rate
on self-employment income for any taxable year beginning after Dec. 31, 1972, and
before Jan. 1, 1974, were struck out.
1973 - Subsec. (b)(2). Pub. L. 93-233 substituted ‘1974’
for ‘1978’.
Subsec. (b)(3). Pub. L. 93-233 substituted ‘1973’ and ‘1978’ for ‘1977’
and ‘1981’ and decreased the rate of tax from 1.25 percent to 0.90 percent.
Subsec. (b)(4). Pub. L. 93-233 substituted ‘1977’ and ‘1981’ for ‘1980’
and ‘1986’ and decreased the rate of tax from 1.35 percent to 1.10 percent.
Subsec. (b)(5). Pub. L. 93-233 substituted ‘beginning after December 31, 1980, and before January 1, 1986’ for ‘beginning
after December 31, 1985’ and decreased the rate of tax from 1.45 percent to 1.35 percent.
Subsec. (b)(6). Pub. L. 93-233 added par. (6).
1972 - Subsec. (a)(3). Pub. L. 92-603, Sec. 135(a)(1)(A), substituted ‘1973’ for ‘1978’.
Subsec. (a)(4). Pub. L. 92-603, Sec. 135(a)(1)(B), substituted provisions that in the case of taxable years beginning after Dec. 31,
1972, the tax shall be equal to 7.0 percent of the amount of the self-employment income
for such taxable year, for provisions that in the case of taxable years beginning
after Dec. 31, 1977, and before Jan. 1, 2011, the tax shall be equal to 6.7 percent
of the amount of the self-employment income for such taxable year.
Subsec. (a)(5). Pub. L. 92-603, Sec. 135(a)(1)(B), struck out par. (5) which provided that in the case of taxable years beginning after
Dec. 31, 2010, the tax shall be equal to 7.0 percent of the amount of the self-employment
income for the taxable year.
Subsec. (a)(3) to (5). Pub. L. 92-336, Sec. 204(a)(1), substituted ‘January 1, 1978’ for ‘January 1, 1973’ and struck out
‘and’ after ‘such taxable year’ in par. (3), extended from any taxable year beginning
after December 31, 1972 to any taxable year beginning after December 31, 1977, and
before January 1, 2011, and decreased from 7.0 percent to 6.7 percent the provisions
relating to the tax on self-employment income in par. (4), and added par. (5).
Subsec. (b)(2). Pub. L. 92-603, Sec. 135(b)(1), increased the rate of tax from 0.9 percent to 1.0 percent.
Subsec. (b)(3). Pub. L. 92-603, Sec. 135(b)(1), substituted ‘1981’ for ‘1986’ and ‘1.25’ for ‘1.0’.
Subsec. (b)(4). Pub. L. 92-603, Sec. 135(b)(1), substituted ‘1980’ for ‘1985’, ‘1986’ for ‘1993’, and ‘1.35’ for ‘1.1’.
Subsec. (b)(5). Pub. L. 92-603, Sec. 135(b)(1), substituted ‘1985’ for ‘1992’ and ‘1.45’ for ‘1.2’.
Subsec. (b)(2) to (5). Pub. L. 92-336, Sec. 204(b)(1), substituted ‘1978’ for ‘1976’ and ‘0.9’ for ‘0.65’ in subsec. (b)(2),
‘1977’ for ‘1975’, ‘1986’ for ‘1980’ and ‘1.0’ for ‘0.70’ in par.
(3), ‘1985’ for ‘1979’, ‘1993’ for ‘1987’ and ‘1.1’ for ‘0.80’ in par. (4), and ‘1992’
for ‘1986’ and ‘1.2’ for ‘0.90’ in par. (5).
1968 - Subsecs. (a)(1) to
(4). Pub. L. 90-248, Sec. 109(a)(1), substituted ‘December 31, 1967’ and ‘January 1, 1969’ for ‘December 31, 1965’ and
‘January 1, 1967’ in par. (1),
‘December 31, 1968’, ‘January 1, 1971’ and ‘6.3’ for ‘December 31, 1966’, ‘January
1, 1969’, and ‘5.9’ in par. (2), and ‘December 31, 1970’ and ‘6.9’ for ‘December 31,
1968’ and ‘6.6’ in par. (3), and reenacted par. (4) without change.
Subsec. (b)(1) to (5). Pub. L. 90-248, Sec. 109(b)(1), struck out par. (1) provision for rate of 0.35 percent of amount of self-employment
income for any taxable year beginning after Dec. 31, 1965, and before Jan. 1, 1967,
redesignated former pars. (2) to (6)
as (1) to (5), substituted ‘December 31, 1967’ for ‘December 31, 1966’
in such par. (1) and increased the rate by 0.10 percent to 0.60, 0.65, 0.70, 0.80,
and 0.90 in pars. (1) to (5), respectively.
1965 - Pub. L. 89-97, Sec. 321(a), divided the total tax imposed under the entire section for each taxable year upon
the self-employment income for such taxable year into two separate taxes by dividing
the section into subsecs. (a) and (b), with subsec. (a) reflecting the tax for old-age,
survivors, and disability insurance and subsec. (b) reflecting a separate tax for
hospital insurance;
reduced from 6.2 percent to 6.15 percent the rate of total tax imposed under the entire
section for taxable years beginning after Dec. 31, 1965, and before Jan. 1, 1967 (resulting
from a tax of 5.8 percent under subsec. (a) and 0.35 percent under subsec. (b)), increased
from 6.2 percent to 6.4 percent the rate for taxable years beginning after Dec. 31,
1966, and before Jan. 1, 1968 (resulting from a tax of 5.9 percent under subsec. (a)
and 0.50 percent under subsec. (b)), reduced from 6.9 percent to 6.4 percent the rate
for taxable years beginning after Dec. 31, 1967, and before Jan. 1, 1969 (resulting
from a tax of 5.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), increased
from 6.9 percent to 7.1 percent the rate for taxable years beginning after Dec. 31,
1968, and before Jan. 1, 1973 (resulting from a tax of 6.6 percent under subsec. (a)
and 0.50 percent under subsec. (b)), from 6.9 percent to 7.55 percent the rate for
taxable years beginning after Dec. 31, 1972, and before Jan. 1, 1976 (resulting from
a tax of 7.0 percent under subsec. (a) and 0.55 percent under subsec. (b)), from 6.9
percent to 7.60 percent the rate for taxable years beginning after Dec. 31, 1975,
and before Jan. 1, 1980 (resulting from a tax of 7.0 percent under subsec. (a) and
0.60 percent under subsec. (b)), from 6.9 percent to 7.70 percent the rate for taxable
years beginning after Dec. 31, 1979, and before Jan. 1, 1987 (resulting from a tax
of 7.0 percent under subsec. (a) and 0.70 percent under subsec. (b)), and from 6.9
percent to 7.80 percent the rate for taxable years beginning after Dec. 31, 1986 (resulting
from a tax of 7.0 percent under subsec. (a) and 0.80 percent under subsec. (b)), and
provided that the exclusion of employee representatives by section 1402(c)(3)
should not apply for purposes of the tax imposed by subsec. (b).
Subsec. (b). Pub. L. 89-97, Sec. 111(c)(4), struck out provision that for purposes of the tax imposed by this subsection, the
exclusion of employee representatives by section 1402(c)(3) shall not apply.
1961 - Pub. L. 87-64 increased the rate of tax for taxable years beginning after Dec. 31, 1961, and before
Jan. 1, 1963, from 4 1/2 to 4.7 percent, taxable years beginning after Dec. 31, 1962,
and before Jan. 1, 1966, from 5 1/4 to 5.4 percent, taxable years beginning after
Dec. 31, 1965, and before Jan. 1, 1968, from 6 to 6.2 percent, taxable year beginning
after Dec. 31, 1967, and before Jan. 1, 1969, from 6 to 6.9 percent, and taxable years
beginning after Dec. 31, 1968, from 6 3/4 to 6.9 percent.
1958 - Pub. L. 85-840 increased the rate of tax by substituting provisions imposing a tax of 3 3/4 percent
for taxable years beginning after Dec. 31, 1958, 4 1/2 percent for years beginning
after Dec. 31, 1959, 5 1/4 percent for years beginning after Dec. 31, 1962, 6 percent
for years beginning after Dec. 31, 1965, and 6 3/4 percent for years beginning after
Dec. 31, 1968, for provisions which imposed a tax of 3 3/8 percent for taxable years
beginning after Dec. 31, 1956, 4 1/8 percent for years beginning after Dec. 31, 1959,
4 7/8 percent for years beginning after Dec. 31, 1964, 5 5/8 percent for years beginning
after Dec. 31, 1969, and 6 3/8 percent for years beginning after Dec. 31, 1974.
1956 - Act Aug. 1, 1956, increased the rate of tax for all taxable years beginning after
Dec. 31, 1956, by three-eighths percent.
1954 - Act Sept. 1, 1954, increased the 4 7/8 percent rate of tax on self-employment income
for taxable years beginning after Dec. 31, 1969, to 5 1/4 percent for taxable years
beginning after Dec. 31, 1969, and before Jan. 1, 1975, and 6 percent for taxable
years beginning after Dec. 31, 1974.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 221(a), effective on the date of the enactment of this Act [Enacted:
Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2)
SAVINGS PROVISION.—If—
“(A)
any provision amended or repealed by the amendments made by this section applied to—
“(i)
any transaction occurring before the date of the enactment of this Act [Enacted: Dec.
19, 2014],
“(ii)
any property acquired before such date of enactment, or
“(iii)
any item of income, loss, deduction, or credit taken into account before such date
of enactment, and
“(B)
the treatment of such transaction, property, or item under such provision would (without
regard to the amendments or repeals made by this section)
affect the liability for tax for periods ending after date of enactment, nothing in
the amendments or repeals made by this section shall be construed to affect the treatment
of such transaction, property, or item for purposes of determining liability for tax
for periods ending after such date of enactment.”
EFFECTIVE DATE OF 2010 AMENDMENTS
Amendments by Pub. L. 111-152, Sec. 1402(b)(1), effective for remuneration received, and taxable years beginning, after December
31, 2012.
Amendments by Pub. L. 111-148, Sec. 9015(b), effective for remuneration received, and taxable years beginning, after December
31, 2012.
Amendments by Pub. L. 111-148, Sec. 10906(b), effective for remuneration received, and taxable years beginning, after December
31, 2012.
EFFECTIVE DATE OF 2004 AMENDMENT
Amendment by Pub. L. 108-203 effective on the date of the enactment of this Act [Enacted: Mar. 2, 2004].
EFFECTIVE DATE OF 1983 AMENDMENT
Section 124(d) of Pub. L. 98-21 provided that:
‘(1) In general. - Except as provided in paragraph
(2), the amendments made by this section (amending this section, sections 32, 164,
275, 401, and 1402 of this title, and section 411 of Title 42, The Public Health and
Welfare) shall apply to taxable years beginning after December 31, 1983.
‘(2) Subsection (c). - The amendments made by subsection
(c) (amending sections 32, 164, 275, 401, and 1402 of this title and section 411 of
Title 42) shall apply to taxable years beginning after December 31, 1989.’
EFFECTIVE DATE OF 1977 AMENDMENT
Section 104 of title I of Pub. L. 95-216 provided that: ‘The amendments made by this title (amending this section, sections
3101 and 3111 of this title, and sections 401, 415, and 430 of Title 42, The Public
Health and Welfare) shall apply with respect to remuneration paid or received, and
taxable years beginning, after 1977.’
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) set
out as a note under section 2 of this title.
EFFECTIVE DATE OF 1973 AMENDMENT
Section 6(c) of Pub. L. 93-233 provided that: ‘The amendment made by subsection
(b)(1) (amending this section) shall apply only with respect to taxable years beginning
after December 31, 1973. The remaining amendments made by this section (amending sections
3101 and 3111 of this title)
shall apply only with respect to remuneration paid after December 31, 1973.’
EFFECTIVE DATE OF 1972 AMENDMENTS
Section 135(c) of Pub. L. 92-603 provided that: ‘The amendments made by subsections (a)(1) and (b)(1) (amending this
section) shall apply only with respect to taxable years beginning after December 31,
1972. The remaining amendments made by this section (amending sections 3101 and 3111
of this title) shall apply only with respect to remuneration paid after December 31,
1972.’
Section 204(c) of Pub. L. 92-336 provided that: ‘The amendments made by subsections (a)(1) and (b)(1) (amending this
section) shall apply only with respect to taxable years beginning after December 31,
1972. The remaining amendments made by this section (amending sections 3101 and 3111
of this title) shall apply only with respect to remuneration paid after December 31,
1972.’
EFFECTIVE DATE OF 1968 AMENDMENT
Section 109(c) of Pub. L. 90-248 provided that: ‘The amendments made by subsections (a)(1) and (b)(1) (amending this
section) shall apply only with respect to taxable years beginning after December 31,
1967. The remaining amendments made by this section (amending sections 3101 and 3111
of this title) shall apply only with respect to remuneration paid after December 31,
1967.’
EFFECTIVE DATE OF 1965 AMENDMENT
Amendment by section 111(c)(4) of Pub. L. 89-97 applicable to calendar year 1966 or to any subsequent calendar year but only if by
October 1 immediately preceding such calendar year the Railroad Retirement Tax Act
(section 3201 et seq. of this title) provides for a maximum amount of monthly compensation
taxable under such Act during all months of such calendar year equal to one-twelfth
of maximum wages which Federal Insurance Contributions Act (section 3101 et seq. of
this title) provides may be counted for such calendar year, see section 111(e) of
Pub. L. 89-97, set out as an Effective Date note under section 1395i-1 of Title 42, The Public
Health and Welfare.
Section 321(d) of Pub. L. 89-97 provided that: ‘The amendments made by subsection
(a) (amending this section) shall apply only with respect to taxable years beginning
after December 31, 1965. The amendments made by subsections
(b) and (c) (amending sections 3101 and 3111 of this title) shall apply only with
respect to remuneration paid after December 31, 1965.’
EFFECTIVE DATE OF 1961 AMENDMENT
Section 201(d) of Pub. L. 87-64 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply with respect to taxable years beginning after
December 31, 1961. The amendments made by subsections
(b) and (c) (amending sections 3101 and 3111 of this title) shall apply with respect
to remuneration paid after December 31, 1961.’
EFFECTIVE DATE OF 1958 AMENDMENT
Section 401(d) of Pub. L. 85-840 provided that: ‘The amendment made by subsection
(a) (amending this section) shall apply with respect to taxable years beginning after
December 31, 1958. The amendments made by subsections
(b) and (c) (amending sections 3101 and 3111 of this title) shall apply with respect
to remuneration paid after December 31, 1958.’
EFFECTIVE DATE OF 1956 AMENDMENT
Section 202(d) of act Aug. 1, 1956, provided that:
‘The amendment made by subsection (a) (amending this section) shall apply with respect
to taxable years beginning after December 31, 1956. The amendments made by subsections
(b) and (c) (amending sections 3101 and 3111 of this title) shall apply with respect
to remuneration paid after December 31, 1956.’
CREDIT FOR SICK LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS
Sec. 9642 of Pub. L. 117-2 provided:
“SEC. 9642. CREDIT FOR SICK LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS.
“(a) IN GENERAL.—In the case of an eligible self-employed individual, there shall
be allowed as a credit against the tax imposed by chapter 1 of the Internal Revenue Codeof 1986 for any taxable year an amount equal to the qualified sick leave equivalent
amount with respect to the individual.
“(b) ELIGIBLE SELF-EMPLOYED INDIVIDUAL.—For purposes of this section—
“(1) IN GENERAL.—The term ‘‘eligible self-employed individual’’
means an individual who—
“(A) regularly carries on any trade or business within the meaning of section 1402 of the Internal Revenue Code of 1986, and
“(B) would be entitled to receive paid leave during the taxable year pursuant to the
Emergency Paid Sick Leave Act if—
“(i) the individual were an employee of an employer (other than himself or herself),
and
“(ii) such Act applied after March 31, 2021.
“(2) RULES OF APPLICATION.—For purposes of paragraph (1)(B), in determining whether
an individual would be entitled to receive paid leave under the Emergency Paid Sick
Leave Act, such Act shall be applied—
“(A) by inserting ‘‘, the employee is seeking or awaiting the results of a diagnostic
test for, or a medical diagnosis of, COVID–19 and such employee has been exposed to
COVID–19 or is unable to work pending the results of such test or diagnosis, or the
employee is obtaining immunization related to COVID–19 or recovering from any injury,
disability, illness, or condition related to such immunization’’ after ‘‘medical diagnosis’’
in section 5102(a)(3) of such Act, and
“(B) by applying section 5102(b)(1) of such Act separately with respect to each taxable
year.
“(c) QUALIFIED SICK LEAVE EQUIVALENT AMOUNT.—For purposes of this section—
“(1) IN GENERAL.—The term ‘‘qualified sick leave equivalent amount’’
means, with respect to any eligible self-employed individual, an amount equal to—
“(A) the number of days during the taxable year (but not more than 10) that the individual
is unable to perform services in any trade or business referred to in section 1402 of the Internal Revenue Code of 1986 for a reason with respect to which such individual would be entitled to receive
sick leave as described in subsection
(b), multiplied by
“(B) the lesser of—
“(i) $200 ($511 in the case of any day of paid sick time described in paragraph (1),
(2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act, applied with
the modification described in subsection (b)(2)(A)) of this section, or
“(ii) 67 percent (100 percent in the case of any day of paid sick time described in
paragraph
(1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act) of the average
daily self-employment income of the individual for the taxable year.
“(2) AVERAGE DAILY SELF-EMPLOYMENT INCOME.—For purposes of this subsection, the term
‘‘average daily self-employment income’’
means an amount equal to—
“(A) the net earnings from self-employment of the individual for the taxable year,
divided by
“(B) 260.
“(3) ELECTION TO USE PRIOR YEAR NET EARNINGS FROM SELFEMPLOYMENT INCOME.—In the case
of an individual who elects (at such time and in such manner as the Secretary may
provide) the application of this paragraph, paragraph
(2)(A) shall be applied by substituting ‘‘the prior taxable year’’ for ‘‘the taxable
year’’.
“(4) ELECTION TO NOT TAKE DAYS INTO ACCOUNT.—Any day shall not be taken into account
under paragraph (1)(A) if the eligible self-employed individual elects
(at such time and in such manner as the Secretary may prescribe) to not take such
day into account for purposes of such paragraph.
“(d) CREDIT REFUNDABLE.—
“(1) IN GENERAL.—The credit determined under this section shall be treated as a credit
allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of
such Code.
“(2) TREATMENT OF PAYMENTS.—For purposes of section 1324 of title 31, United States
Code, any refund due from the credit determined under this section shall be treated
in the same manner as a refund due from a credit provision referred to in subsection
(b)(2) of such section.
“(e) SPECIAL RULES.—
“(1) DOCUMENTATION.—No credit shall be allowed under this section unless the individual
maintains such documentation as the Secretary may prescribe to establish such individual
as an eligible self-employed individual.
“(2) DENIAL OF DOUBLE BENEFIT.—In the case of an individual who receives wages (as
defined in section 3121(a) of the Internal Revenue Code of 1986) or compensation (as defined in section 3231(e) of such Code) paid by an employer
which are required to be paid by reason of the Emergency Paid Sick Leave Act, the
qualified sick leave equivalent amount otherwise determined under subsection
(c) of this section shall be reduced (but not below zero) to the extent that the sum
of the amount described in such subsection and in section 3131(b)(1) of such Code
exceeds $2,000 ($5,110 in the case of any day any portion of which is paid sick time
described in paragraph
(1), (2), or (3) of section 5102(a) of the Emergency Paid Sick Leave Act).
“(f) APPLICATION OF SECTION.—Only days occurring during the period beginning on April
1, 2021, and ending on September 30, 2021, may be taken into account under subsection
(c)(1)(A).
“(g) APPLICATION OF CREDIT IN CERTAIN POSSESSIONS.—
“(1) PAYMENTS TO POSSESSIONS WITH MIRROR CODE TAX SYSTEMS.—The Secretary shall pay
to each possession of the United States which has a mirror code tax system amounts
equal to the loss (if any) to that possession by reason of the application of the
provisions of this section. Such amounts shall be determined by the Secretary based
on information provided by the government of the respective possession.
“(2) PAYMENTS TO OTHER POSSESSIONS.—The Secretary shall pay to each possession of
the United States which does not have a mirror code tax system amounts estimated by
the Secretary as being equal to the aggregate benefits
(if any) that would have been provided to residents of such possession by reason of
the provisions of this section if a mirror code tax system had been in effect in such
possession. The preceding sentence shall not apply unless the respective possession
has a plan, which has been approved by the Secretary, under which such possession
will promptly distribute such payments to its residents.
“(3) MIRROR CODE TAX SYSTEM.—For purposes of this section, the term ‘‘mirror code
tax system’’ means, with respect to any possession of the United States, the income
tax system of such possession if the income tax liability of the residents of such
possession under such system is determined by reference to the income tax laws of
the United States as if such possession were the United States.
“(4) TREATMENT OF PAYMENTS.—For purposes of section 1324 of title 31, United States
Code, the payments under this subsection shall be treated in the same manner as a
refund due from a credit provision referred to in subsection
(b)(2) of such section.
“(h) REGULATIONS.—The Secretary shall prescribe such regulations or other guidance
as may be necessary to carry out the purposes of this section, including—
“(1) regulations or other guidance to effectuate the purposes of this section, and
“(2) regulations or other guidance to minimize compliance and record-keeping burdens
under this section.”
CREDIT FOR FAMILY LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS
Sec. 9643 of Pub. L. 117-2 provided:
“SEC. 9643. CREDIT FOR FAMILY LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS.
“(a) IN GENERAL.—In the case of an eligible self-employed individual, there shall
be allowed as a credit against the tax imposed by chapter 1 of the Internal Revenue Codeof 1986 for any taxable year an amount equal to 100 percent of the qualified family
leave equivalent amount with respect to the individual.
“(b) ELIGIBLE SELF-EMPLOYED INDIVIDUAL.—For purposes of this section—
“(1) IN GENERAL.—The term ‘‘eligible self-employed individual’’
means an individual who—
“(A) regularly carries on any trade or business within the meaning of section 1402 of the Internal Revenue Code of 1986, and
“(B) would be entitled to receive paid leave during the taxable year pursuant to the
Emergency Family and Medical Leave Expansion Act if—
“(i) the individual were an employee of an employer (other than himself or herself),
“(ii) section 102(a)(1)(F)
of the Family and Medical Leave Act of 1993 applied after March 31, 2021.
“(2) RULES OF APPLICATION.—For purposes of paragraph (1)(B), in determining whether
an individual would be entitled to receive paid leave under the Emergency Family and
Medical Leave Act—
“(A) section 110(a)(2)(A)
of the Family and Medical Leave Act of 1993 shall be applied by inserting ‘‘or any
reason for leave described in section 5102(a) of the Families First Coronavirus Response
Act, or the employee is seeking or awaiting the results of a diagnostic test for,
or a medical diagnosis of, COVID–19 and such employee has been exposed to COVID–19
or is unable to work pending the results of such test or diagnosis, or the employee
is obtaining immunization related to COVID–19 or recovering from any injury, disability,
illness, or condition related to such immunization’’ after ‘‘public health emergency’’,
and
“(B) section 110(b)
of such Act shall be applied—
“(i) without regard to paragraph (1) thereof, and
“(ii) by striking ‘‘after taking leave after such section for 10 days’’ in paragraph
(2)(A) thereof.
“(c) QUALIFIED FAMILY LEAVE EQUIVALENT AMOUNT.—For purposes of this section—
“(1) IN GENERAL.—The term ‘‘qualified family leave equivalent amount’’
means, with respect to any eligible self-employed individual, an amount equal to the
product of—
“(A) the number of days (not to exceed 60) during the taxable year that the individual
is unable to perform services in any trade or business referred to in section 1402 of the Internal Revenue Code of 1986 for a reason with respect to which such individual would be entitled to receive
paid leave as described in subsection
(b) of this section, multiplied by
“(B) the lesser of—
“(i) 67 percent of the average daily self-employment income of the individual for
the taxable year, or
“(ii) $200.
“(2) AVERAGE DAILY SELF-EMPLOYMENT INCOME.—For purposes of this subsection, the term
‘‘average daily self-employment income’’
means an amount equal to—
“(A) the net earnings from self-employment income of the individual for the taxable
year, divided by
“(B) 260.
“(3) ELECTION TO USE PRIOR YEAR NET EARNINGS FROM SELFEMPLOYMENT INCOME.—In the case
of an individual who elects (at such time and in such manner as the Secretary may
provide) the application of this paragraph, paragraph
(2)(A) shall be applied by substituting ‘‘the prior taxable year’’ for ‘‘the taxable
year’’.
“(4) COORDINATION WITH CREDIT FOR SICK LEAVE.—Any day taken into account in determining
the qualified sick leave equivalent amount with respect to any eligible-self employed
individual under section 9642 shall not be take into account in determining the qualified
family leave equivalent amount with respect to such individual under this section.
“(d) CREDIT REFUNDABLE.—
“(1) IN GENERAL.—The credit determined under this section shall be treated as a credit
allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of
such Code.
“(2) TREATMENT OF PAYMENTS.—For purposes of section 1324 of title 31, United States
Code, any refund due from the credit determined under this section shall be treated
in the same manner as a refund due from a credit provision referred to in subsection
(b)(2) of such section.
“(e) SPECIAL RULES.—
“(1) DOCUMENTATION.—No credit shall be allowed under this section unless the individual
maintains such documentation as the Secretary may prescribe to establish such individual
as an eligible self-employed individual.
“(2) DENIAL OF DOUBLE BENEFIT.—In the case of an individual who receives wages (as
defined in section 3121(a) of the Internal Revenue Code of 1986) or compensation (as defined in section 3231(e) of such Code) paid by an employer
which are required to be paid by reason of the Emergency Family and Medical Leave
Expansion Act, the qualified family leave equivalent amount otherwise described in
subsection (c) of this section shall be reduced (but not below zero) to the extent
that the sum of the amount described in such subsection and in section 3132(b)(1)
of such Code exceeds $12,000.
“(3) REFERENCES TO EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT.—Any reference
in this section to the Emergency Family and Medical Leave Expansion Act shall be treated
as including a reference to the amendments made by such Act.
“(f) APPLICATION OF SECTION.—Only days occurring during the period beginning on April
1, 2021 and ending on September 30, 2021, may be taken into account under subsection
(c)(1)(A).
“(g) APPLICATION OF CREDIT IN CERTAIN POSSESSIONS.—
“(1) PAYMENTS TO POSSESSIONS WITH MIRROR CODE TAX SYSTEMS.—The Secretary shall pay
to each possession of the United States which has a mirror code tax system amounts
equal to the loss (if any) to that possession by reason of the application of the
provisions of this section. Such amounts shall be determined by the Secretary based
on information provided by the government of the respective possession.
“(2) PAYMENTS TO OTHER POSSESSIONS.—The Secretary shall pay to each possession of
the United States which does not have a mirror code tax system amounts estimated by
the Secretary as being equal to the aggregate benefits
(if any) that would have been provided to residents of such possession by reason of
the provisions of this section if a mirror code tax system had been in effect in such
possession. The preceding sentence shall not apply unless the respective possession
has a plan, which has been approved by the Secretary, under which such possession
will promptly distribute such payments to its residents.
“(3) MIRROR CODE TAX SYSTEM.—For purposes of this section, the term ‘‘mirror code
tax system’’ means, with respect to any possession of the United States, the income
tax system of such possession if the income tax liability of the residents of such
possession under such system is determined by reference to the income tax laws of
the United States as if such possession were the United States.
“(4) TREATMENT OF PAYMENTS.—For purposes of section 1324 of title 31, United States
Code, the payments under this subsection shall be treated in the same manner as a
refund due from a credit provision referred to in subsection
(b)(2) of such section.
“(h) REGULATIONS.—The Secretary shall prescribe such regulations or other guidance
as may be necessary to carry out the purposes of this section, including—
“(1) regulations or other guidance to prevent the avoidance of the purposes of this
section, and
“(2) regulations or other guidance to minimize compliance and record-keeping burdens
under this section.”
DELAY OF PAYMENT OF EMPLOYER PAYROLL TAXES
Sec. 2302 of Pub. L. 116-136 provided:
SEC. 2302. DELAY OF PAYMENT OF EMPLOYER PAYROLL TAXES.
(a) IN GENERAL.—
“(1) TAXES.—Notwithstanding any other provision of law, the payment for applicable
employment taxes for the payroll tax deferral period shall not be due before the applicable
date.
“(2) DEPOSITS.—Notwithstanding section 6302 of the Internal Revenue Code of 1986, an employer shall be treated as having timely made all deposits of applicable
employment taxes that are required to be made (without regard to this section) for
such taxes during the payroll tax deferral period if all such deposits are made not
later than the applicable date.
“(3) EXCEPTION.—This subsection shall not apply to any taxpayer if such taxpayer has
had indebtedness forgiven under section 1106 of this Act with respect to a loan under
paragraph
(36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102 of this Act, or indebtedness forgiven under section 1109
of this Act.
“(b) SECA.—
“(1) IN GENERAL.—Notwithstanding any other provision of law, the payment for 50 percent
of the taxes imposed under section 1401(a) of the Internal Revenue Code of 1986 for the payroll tax deferral period shall not be due before the applicable
date.
“(2) ESTIMATED TAXES.—For purposes of applying section 6654 of the Internal Revenue Code of 1986 to any taxable year which includes any part of the payroll tax deferral period,
50 percent of the taxes imposed under section 1401(a) of such Code for the payroll
tax deferral period shall not be treated as taxes to which such section 6654 applies.
“(c) LIABILITY OF THIRD PARTIES.—
“(1) ACTS TO BE PERFORMED BY AGENTS.—For purposes of section 3504 of the Internal Revenue Code of 1986, in the case of any person designated pursuant to such section (and any regulations
or other guidance issued by the Secretary with respect to such section) to perform
acts otherwise required to be performed by an employer under such Code, if such employer
directs such person to defer payment of any applicable employment taxes during the
payroll tax deferral period under this section, such employer shall be solely liable
for the payment of such applicable employment taxes before the applicable date for
any wages paid by such person on behalf of such employer during such period.
“(2) CERTIFIED PROFESSIONAL EMPLOYER ORGANIZATIONS.—For purposes of section 3511,
in the case of a certified professional employer organization (as defined in subsection
(a) of section 7705 of the Internal Revenue Code of 1986) that has entered into a service contract described in subsection
(e)(2) of such section with a customer, if such customer directs such organization
to defer payment of any applicable employment taxes during the payroll tax deferral
period under this section, such customer shall, notwithstanding subsections (a) and
(c) of section 3511, be solely liable for the payment of such applicable employment
taxes before the applicable date for any wages paid by such organization to any work
site employee performing services for such customer during such period.
“(d) DEFINITIONS.—For purposes of this section—
“(1) APPLICABLE EMPLOYMENT TAXES.—The term ‘‘applicable employment taxes’’ means the
following:
“(A) The taxes imposed under section 3111(a) of the Internal Revenue Code of 1986.
“(B) So much of the taxes imposed under section 3211(a) of such Code as are attributable
to the rate in effect under section 3111(a) of such Code.
“(C) So much of the taxes imposed under section 3221(a) of such Code as are attributable
to the rate in effect under section 3111(a) of such Code.
“(2) PAYROLL TAX DEFERRAL PERIOD.—The term ‘‘payroll tax deferral period’’ means the
period beginning on the date of the enactment of this Act and ending before January
1, 2021.
“(3) APPLICABLE DATE.—The term ‘‘applicable date’’ means—
“(A) December 31, 2021, with respect to 50 percent of the amounts to which subsection
(a) or (b), as the case may be, apply, and
“(B) December 31, 2022, with respect to the remaining such amounts.
“(4) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of the Treasury (or the Secretary's delegate).”
* * *
CREDIT FOR FAMILY LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS
Sec. 7004 of Pub. L. 116-127, as amended by Pub. L. 116-260, Div. N, Secs. 286(a),
(b)(4), and 287(b), provided:
“SEC. 7004. CREDIT FOR FAMILY LEAVE FOR CERTAIN SELF-EMPLOYED INDIVIDUALS.
“(a) CREDIT AGAINST SELF-EMPLOYMENT TAX.—In the case of an eligible self-employed
individual, there shall be allowed as a credit against the tax imposed by subtitle
A of the Internal Revenue Code of 1986 for any taxable year an amount equal to 100
percent of the qualified family leave equivalent amount with respect to the individual.
“(b) ELIGIBLE SELF-EMPLOYED INDIVIDUAL.—For purposes of this section, the term ‘‘eligible
self-employed individual’’ means an individual who—
“(1) regularly carries on any trade or business within the meaning of section 1402
of such Code, and
“(2) either—
‘‘(A) would be entitled to receive paid leave during the taxable year pursuant to
the Emergency Family and Medical Leave Expansion Act if the individual were an employee
of an employer (other than himself or herself), or
‘‘(B) would be so entitled if—
‘‘(i) section 102(a)(1)(F) of the Family and Medical Leave Act of 1993, as amended
by the Emergency Family and Medical Leave Expansion Act, were applied by substituting
‘March 31, 2021’ for ‘December 31, 2020’, and
‘‘(ii) the individual were an employee of an employer (other than himself or herself).”
“(c) QUALIFIED FAMILY LEAVE EQUIVALENT AMOUNT.—For purposes of this section—
“(1) IN GENERAL.—The term ‘‘qualified family leave equivalent amount’’
means, with respect to any eligible self-employed individual, an amount equal to the
product of—
“(A) the number of days (not to exceed 50) during the taxable year that the individual
is unable to perform services in any trade or business referred to in section 1402
of such Code for a reason with respect to which such individual would be entitled
to receive paid leave as described in subsection (b), multiplied by
“(B) the lesser of—
“(i) 67 percent of the average daily self-employment income of the individual for
the taxable year, or
“(ii) $200.
“(2) AVERAGE DAILY SELF-EMPLOYMENT INCOME.—For purposes of this subsection, the term
‘‘average daily self-employment income’’
means an amount equal to—
“(A) the net earnings from self-employment income of the individual for the taxable
year, divided by
“(B) 260.
‘‘(4) ELECTION TO USE PRIOR YEAR NET EARNINGS FROM SELF-EMPLOYMENT INCOME.—In the
case of an individual who elects (at such time and in such manner as the Secretary,
or the Secretary's delegate, may provide) the application of this paragraph, paragraph
(2)(A) shall be applied by substituting ‘the prior taxable year’ for ‘the taxable
year’.”
“(d) SPECIAL RULES.—
“(1) CREDIT REFUNDABLE.—
“(A) IN GENERAL.—The credit determined under this section shall be treated as a credit
allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of
such Code.
“(B) TREATMENT OF PAYMENTS.—For purposes of section 1324 of title 31, United States
Code, any refund due from the credit determined under this section shall be treated
in the same manner as a refund due from a credit provision referred to in subsection
(b)(2) of such section.
“(2) DOCUMENTATION.—No credit shall be allowed under this section unless the individual
maintains such documentation as the Secretary of the Treasury (or the Secretary's
delegate) may prescribe to establish such individual as an eligible self-employed
individual.
“(3) DENIAL OF DOUBLE BENEFIT.—In the case of an individual who receives wages (as
defined in section 3121(a) of the Internal Revenue Code of 1986) or compensation (as defined in section 3231(e) of the Internal Revenue Code)
paid by an employer which are required to be paid by reason of the Emergency Family
and Medical Leave Expansion Act, the qualified family leave equivalent amount otherwise
described in subsection (c) shall be reduced (but not below zero) to the extent that
the sum of the amount described in such subsection and in section 7003(b)(1) exceeds
$10,000.
“(4) CERTAIN TERMS.—Any term used in this section which is also used in chapter 2 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter.
“(5) REFERENCES TO EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT.—Any reference
in this section to the Emergency Family and Medical Leave Expansion Act shall be treated
as including a reference to the amendments made by such Act.
“(e) APPLICATION OF SECTION.—Only days occurring during the period beginning on a
date selected by the Secretary of the Treasury (or the Secretary's delegate) which
is during the 15-day period beginning on the date of the enactment of this Act, and
ending on March 31, 2022, may be taken into account under subsection (c)(1)(A).
“(f) APPLICATION OF CREDIT IN CERTAIN POSSESSIONS.—
“(1) PAYMENTS TO POSSESSIONS WITH MIRROR CODE TAX SYSTEMS.—The Secretary of the Treasury
(or the Secretary's delegate) shall pay to each possession of the United States which
has a mirror code tax system amounts equal to the loss (if any) to that possession
by reason of the application of the provisions of this section. Such amounts shall
be determined by the Secretary of the Treasury (or the Secretary's delegate)
based on information provided by the government of the respective possession.
“(2) PAYMENTS TO OTHER POSSESSIONS.—The Secretary of the Treasury (or the Secretary's
delegate) shall pay to each possession of the United States which does not have a
mirror code tax system amounts estimated by the Secretary of the Treasury (or the
Secretary's delegate) as being equal to the aggregate benefits (if any) that would
have been provided to residents of such possession by reason of the provisions of
this section if a mirror code tax system had been in effect in such possession. The
preceding sentence shall not apply unless the respective possession has a plan, which
has been approved by the Secretary of the Treasury
(or the Secretary's delegate), under which such possession will promptly distribute
such payments to its residents.
“(3) MIRROR CODE TAX SYSTEM.—For purposes of this section, the term ‘‘mirror code
tax system’’ means, with respect to any possession of the United States, the income
tax system of such possession if the income tax liability of the residents of such
possession under such system is determined by reference to the income tax laws of
the United States as if such possession were the United States.
“(4) TREATMENT OF PAYMENTS.—For purposes of section 1324 of title 31, United States
Code, the payments under this section shall be treated in the same manner as a refund
due from a credit provision referred to in subsection
(b)(2) of such section.
“(e) REGULATIONS.—The Secretary of the Treasury (or the Secretary's delegate) shall
prescribe such regulations or other guidance as may be necessary to carry out the
purposes of this section, including—
“(1) regulations or other guidance to prevent the avoidance of the purposes of this
Act, and
“(2) regulations or other guidance to minimize compliance and record-keeping burdens
under this section.”
TEMPORARY EMPLOYEE PAYROLL TAX CUT
Section 601 of Pub. L. 111-312, as amended by Pub. L. 112-78, Sec. 101, and Pub. L. 112-96, Sec. 1001, provided that:
“SEC. 601. TEMPORARY EMPLOYEE PAYROLL TAX CUT.
“(a)
IN GENERAL.—Notwithstanding any other provision of law,—
“(1)
with respect to any taxable year which begins in the payroll tax holiday period, the
rate of tax under section 1401(a) of the Internal Revenue Code of 1986 shall be 10.40 percent, and
“(2)
with respect to remuneration received during the payroll tax holiday period, the rate
of tax under 3101(a) of such Code shall be 4.2 percent
(including for purposes of determining the applicable percentage under sections 3201(a)
and 3211(a)(1) of such Code).
“(b)
COORDINATION WITH DEDUCTIONS FOR EMPLOYMENT TAXES.—
“(1)
DEDUCTION IN COMPUTING NET EARNINGS FROM SELF-EMPLOYMENT.—For purposes of applying
section 1402(a)(12)
of the Internal Revenue Codeof 1986, the rate of tax imposed by subsection 1401(a) of such Code shall be determined
without regard to the reduction in such rate under this section.
“(2)
INDIVIDUAL DEDUCTION.—In the case of the taxes imposed by section 1401 of such Code
for any taxable year which begins in the payroll tax holiday period, the deduction
under section 164(f) of such Code with respect to such taxes shall be equal to the
sum of—
“(A)
59.6 percent of the portion of such taxes attributable to the tax imposed by section
1401(a) of such Code (determined after the application of this section), plus
“(B)
one-half of the portion of such taxes attributable to the tax imposed by section 1401(b)
of such Code.
“(c)
PAYROLL TAX HOLIDAY PERIOD.—The term ‘payroll tax holiday period' means calendar years
2011 and 2012.
“(d)
EMPLOYER NOTIFICATION.—The Secretary of the Treasury shall notify employers of the
payroll tax holiday period in any manner the Secretary deems appropriate.
“(e)
TRANSFERS OF FUNDS.—
“(1)
TRANSFERS TO FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST FUND.—There are hereby
appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability
Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the application
of subsection (a). Amounts appropriated by the preceding sentence shall be transferred
from the general fund at such times and in such manner as to replicate to the extent
possible the transfers which would have occurred to such Trust Fund had such amendments
not been enacted.
“(2)
TRANSFERS TO SOCIAL SECURITY EQUIVALENT BENEFIT ACCOUNT.—There are hereby appropriated
to the Social Security Equivalent Benefit Account established under section 15A(a)
of the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a))
amounts equal to the reduction in revenues to the Treasury by reason of the application
of subsection (a)(2). Amounts appropriated by the preceding sentence shall be transferred
from the general fund at such times and in such manner as to replicate to the extent
possible the transfers which would have occurred to such Account had such amendments
not been enacted.
“(3)
COORDINATION WITH OTHER FEDERAL LAWS.—For purposes of applying any provision of Federal
law other than the provisions of the Internal Revenue Code of 1986, the rate of tax
in effect under section 3101(a)
of such Code shall be determined without regard to the reduction in such rate under
this section.”
Pub. L. 112-96, Sec. 1001(b), struck subsec. (f) and (g)
of Sec. 601 of Pub. L. 111-312, as amended by Pub. L. 112-78, Sec. 101, effective for remuneration received, and taxable years beginning, after December
31, 2011. Before being struck, Sec. 601(f) and (g) read as follows:
“(f)
SPECIAL RULES FOR 2012.—
“(1)
LIMITATION ON SELF-EMPLOYMENT INCOME.—In the case of any taxable year beginning in
2012, subsection (a)(1) shall only apply with respect to so much of the taxpayer's
self-employment income (as defined in section 1402(b) of the Internal Revenue Code of 1986) as does not exceed the excess (if any) of—
“(A)
$18,350, over
“(B)
the amount of wages and compensation received during the portion of the payroll tax
holiday period occurring during 2012 subject to tax under section 3101(a) of such
Code or section 3201(a) of such Code.
“(2)
COORDINATION WITH DEDUCTION FOR EMPLOYMENT TAXES.—In the case of a taxable year beginning
in 2012, subparagraph (A) of subsection
(b)(2) shall be applied as if it read as follows:
“ ‘(A)
the sum of—
“(i)
59.6 percent of the portion of such taxes attributable to the tax imposed by section
1401(a) of such Code (determined after the application of this section) on so much
of self-employment income (as defined in section 1402(b) of such Code) as does not
exceed the amount of self-employment income described in paragraph (1), plus
“(ii)
one-half of the portion of such taxes attributable to the tax imposed by section 1401(a)
of such Code (determined without regard to this section) on self-employment income
(as so defined) in excess of such amount, plus'.
“(g)
RECAPTURE OF EXCESS BENEFIT.—
“(1)
IN GENERAL.—There is hereby imposed on the income of every individual a tax equal
to 2 percent of the sum of wages (within the meaning of section 3121(a)(1) of the Internal Revenue Code of 1986) and compensation (to which section 3201(a)
of such Code applies) received during the period beginning January 1, 2012, and ending
February 29, 2012, to the extent the amount of such sum exceeds $18,350.
“(2)
REGULATIONS.—The Secretary of the Treasury or the Secretary's delegate shall prescribe
such regulations or other guidance as may be necessary or appropriate to carry out
this subsection, including guidance for payment by the employee of the tax imposed
by paragraph
(1).”
INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION WITH THE EXXON VALDEZ LITIGATION
Pub. L. 110-343, Div. C, Sec. 504, provided that:
“(a)
Income Averaging of Amounts Received From the Exxon Valdez Litigation.—For purposes
of section 1301 of the Internal Revenue Code of 1986—
“(1)
any qualified taxpayer who receives any qualified settlement income in any taxable
year shall be treated as engaged in a fishing business
(determined without regard to the commercial nature of the business), and
“(2)
such qualified settlement income shall be treated as income attributable to such a
fishing business for such taxable year.
“(b)
Contributions of Amounts Received to Retirement Accounts.—
“(1)
IN GENERAL.—Any qualified taxpayer who receives qualified settlement income during
the taxable year may, at any time before the end of the taxable year in which such
income was received, make one or more contributions to an eligible retirement plan
of which such qualified taxpayer is a beneficiary in an aggregate amount not to exceed
the lesser of—
“(A)
$100,000 (reduced by the amount of qualified settlement income contributed to an eligible
retirement plan in prior taxable years pursuant to this subsection), or
“(B)
the amount of qualified settlement income received by the individual during the taxable
year.
“(2)
TIME WHEN CONTRIBUTIONS DEEMED MADE.—For purposes of paragraph
(1), a qualified taxpayer shall be deemed to have made a contribution to an eligible
retirement plan on the last day of the taxable year in which such income is received
if the contribution is made on account of such taxable year and is made not later
than the time prescribed by law for filing the return for such taxable year (not including
extensions thereof).
“(3)
TREATMENT OF CONTRIBUTIONS TO ELIGIBLE RETIREMENT PLANS.—For purposes of the Internal
Revenue Code of 1986, if a contribution is made pursuant to paragraph (1) with respect
to qualified settlement income, then—
“(A)
except as provided in paragraph (4)—
“(i)
to the extent of such contribution, the qualified settlement income shall not be included
in taxable income, and
“(ii)
for purposes of section 72 of such Code, such contribution shall not be considered
to be investment in the contract,
“(B)
the qualified taxpayer shall, to the extent of the amount of the contribution, be
treated—
“(i)
as having received the qualified settlement income—
“(I)
in the case of a contribution to an individual retirement plan (as defined under section
7701(a)(37) of such Code), in a distribution described in section 408(d)(3) of such
Code, and
“(II)
in the case of any other eligible retirement plan, in an eligible rollover distribution
(as defined under section 402(f)(2) of such Code), and
“(ii)
as having transferred the amount to the eligible retirement plan in a direct trustee
to trustee transfer within 60 days of the distribution,
“(C) section 408(d)(3)(B) of the Internal Revenue Code of 1986 shall not apply with respect to amounts treated as a rollover under this paragraph,
and
“(D) section 408A(c)(3)(B) of the Internal Revenue Code of 1986 shall not apply with respect to amounts contributed to a Roth IRA (as defined
under section 408A(b) of such Code) or a designated Roth contribution to an applicable
retirement plan (within the meaning of section 402A of such Code) under this paragraph.
“(4)
SPECIAL RULE FOR ROTH IRAS AND ROTH 401(k)s.—For purposes of the Internal Revenue
Code of 1986, if a contribution is made pursuant to paragraph (1) with respect to
qualified settlement income to a Roth IRA (as defined under section 408A(b) of such
Code) or as a designated Roth contribution to an applicable retirement plan (within
the meaning of section 402A of such Code), then—
“(A)
the qualified settlement income shall be includible in taxable income, and
“(B)
for purposes of section 72 of such Code, such contribution shall be considered to
be investment in the contract.
“(5)
ELIGIBLE RETIREMENT PLAN.—For purpose of this subsection, the term “eligible retirement
plan” has the meaning given such term under section 402(c)(8)(B) of the Internal Revenue Code of 1986.
“(c)
Treatment of Qualified Settlement Income Under Employment Taxes.—
“(1)
SECA.?For purposes of chapter 2 of the Internal Revenue Code of 1986 and section 211 of the Social Security Act, no portion of qualified settlement income received by
a qualified taxpayer shall be treated as self-employment income.
“(2)
FICA.—For purposes of chapter 21 of the Internal Revenue Codeof 1986 and section 209 of the Social Security Act, no portion of qualified settlement income received by
a qualified taxpayer shall be treated as wages.
“(d)
Qualified Taxpayer.—For purposes of this section, the term “qualified taxpayer” means—
“(1)
any individual who is a plaintiff in the civil action In re Exxon Valdez, No. 89-095-CV
(HRH) (Consolidated) (D. Alaska); or
“(2)
any individual who is a beneficiary of the estate of such a plaintiff who-
“(A)
acquired the right to receive qualified settlement income from that plaintiff; and
“(B)
was the spouse or an immediate relative of that plaintiff.
“(e)
Qualified Settlement Income.—For purposes of this section, the term “qualified settlement
income” means any interest and punitive damage awards which are—
“(1)
otherwise includible in taxable income, and
“(2)
received (whether as lump sums or periodic payments) in connection with the civil
action In re Exxon Valdez, No. 89-095-CV (HRH) (Consolidated)
(D. Alaska) (whether pre- or post-judgment and whether related to a settlement or
judgment).”
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be construed to affect treatment of certain transactions occurring, property acquired,
or items of income, loss, deduction, or credit taken into account prior to Nov. 5,
1990, for purposes of determining liability for tax for periods ending after Nov.
5, 1990, see section 11821(b) of Pub. L. 101-508, set out as a note under section 29 of this title.
LAND DIVERTED UNDER 1983 PAYMENT-IN-KIND PROGRAM
Land diverted from production of agricultural commodities under a 1983 payment-in-kind
program to be treated, for purposes of this chapter, as used during the 1983 crop
year by qualified taxpayers in the active conduct of the trade or business of farming,
with qualified taxpayers who materially participate in the diversion and devotion
to conservation uses under a 1983 payment-in-kind program to be treated as materially
participating in the operation of such land during the 1983 crop year, see section
3 of Pub. L. 98-4, set out as a note under section 61 of this title.
DEDUCTION BY OR CREDIT AGAINST INDIVIDUAL INCOME TAX FOR TAXES PAID INTO FOREIGN SOCIAL
SECURITY SYSTEM PURSUANT TO INTERNATIONAL AGREEMENT
Section 317(b)(4) of Pub. L. 95-216 provided that: ‘Notwithstanding any other provision of law, taxes paid by any individual
to any foreign country with respect to any period of employment or self-employment
which is covered under the social security system of such foreign country in accordance
with the terms of an agreement entered into pursuant to section 233 of the Social Security Act (section 433 of Title 42, The Public Health and Welfare)
shall not, under the income tax laws of the United States, be deductible by, or creditable
against the income tax of, any such individual.'
