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Internal Revenue Code, § 1401. Rate Of Tax

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.’
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 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) 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).
“(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.
“(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 December 31, 2020, 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.'