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Internal Revenue Code, § 3111. Rate Of Tax

I.R.C. § 3111(a) Old-Age, Survivors, And Disability Insurance
In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 6.2 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).
I.R.C. § 3111(b) Hospital Insurance
In addition to the tax imposed by the preceding subsection, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 1.45 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).
I.R.C. § 3111(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, wages received by or paid to an individual shall be exempt from the taxes imposed by this section to the extent that such wages are subject under such agreement exclusively to the laws applicable to the security system of such foreign country.
I.R.C. § 3111(d) Repealed
Editor's Note: Repealed by Pub. L. 115-141, div. U, title IV, §401(b)(34), Mar. 23, 2018, 132 Stat. 1204.
I.R.C. § 3111(e) Credit For Employment Of Qualified Veterans
I.R.C. § 3111(e)(1) In General
If a qualified tax-exempt organization hires a qualified veteran with respect to whom a credit would be allowable under section 38 by reason of section 51 if the organization were not a qualified tax-exempt organization, then there shall be allowed as a credit against the tax imposed by subsection (a) on wages paid with respect to employment of all employees of the organization during the applicable period an amount equal to the credit determined under section 51 (after application of the modifications under paragraph (3)) with respect to wages paid to such qualified veteran during such period.
I.R.C. § 3111(e)(2) Overall Limitation
The aggregate amount allowed as a credit under this subsection for all qualified veterans for any period with respect to which tax is imposed under subsection (a) shall not exceed the amount of the tax imposed by subsection (a) on wages paid with respect to employment of all employees of the organization during such period.
I.R.C. § 3111(e)(3) Modifications
For purposes of paragraph (1), section 51 shall be applied—
I.R.C. § 3111(e)(3)(A)
by substituting “26 percent” for “40 percent” in subsection (a) thereof,
I.R.C. § 3111(e)(3)(B)
by substituting “16.25 percent” for “25 percent” in subsection (i)(3)(A) thereof, and
I.R.C. § 3111(e)(3)(C)
by only taking into account wages paid to a qualified veteran for services in furtherance of the activities related to the purpose or function constituting the basis of the organization's exemption under section 501.
I.R.C. § 3111(e)(4) Applicable Period
The term “applicable period” means, with respect to any qualified veteran, the 1-year period beginning with the day such qualified veteran begins work for the organization.
I.R.C. § 3111(e)(5) Definitions
For purposes of this subsection—
I.R.C. § 3111(e)(5)(A)
the term “qualified tax-exempt organization” means an employer that is an organization described in section 501(c) and exempt from taxation under section 501(a), and
I.R.C. § 3111(e)(5)(B)
the term “qualified veteran” has the meaning given such term by section 51(d)(3).
I.R.C. § 3111(f) Credit For Research Expenditures Of Qualified Small Businesses
I.R.C. § 3111(f)(1) In General
In the case of a taxpayer who has made an election under section 41(h) for a taxable year, there shall be allowed as a credit against the tax imposed by subsection (a) for the first calendar quarter which begins after the date on which the taxpayer files the return specified in section 41(h)(4)(A)(ii) an amount equal to the payroll tax credit portion determined under section 41(h)(2).
I.R.C. § 3111(f)(2) Limitation
The credit allowed by paragraph (1) shall not exceed the tax imposed by subsection (a) for any calendar quarter on the wages paid with respect to the employment of all individuals in the employ of the employer.
I.R.C. § 3111(f)(3) Carryover Of Unused Credit
If the amount of the credit under paragraph (1) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be carried to the succeeding calendar quarter and allowed as a credit under paragraph (1) for such quarter.
I.R.C. § 3111(f)(4) Deduction Allowed For Credited Amounts
The credit allowed under paragraph (1) shall not be taken into account for purposes of determining the amount of any deduction allowed under chapter 1 for taxes imposed under subsection (a).
(Aug. 16, 1954, ch. 736, 68A Stat. 416; Sept. 1, 1954, ch. 1206, title II, 208(c), 68 Stat. 1094; Aug. 1, 1956. ch. 836, title II, 202(c), 70 Stat. 845; Aug. 28, 1958. Pub. L. 85-840, title IV, 401(c), 72 Stat. 1042; June 30, 1961, Pub. L. 87-64, title II, 201(c), 75 Stat. 141; July 30, 1965, Pub. L. 89-97, title I, 111(c)(6), title III, 321(c), 79 Stat. 343, 396; Jan. 2, 1968, Pub. L. 90-248, title I, 109(a)(3), (b)(3), 81 Stat. 836, 837; Mar. 17, 1971, Pub. L. 92-5, title II, 204(a)(2), 85 Stat. 11; July 1, 1972, Pub. L. 92-336, title II, 204(a)(3), (b)(3), 86 Stat. 421, 422; Oct. 30, 1972, Pub. L. 92-603, title I, 135(a)(3), (b)(3), 86 Stat. 1363, 1364; Dec. 31, 1973, Pub. L. 93-233, 6(a)(2), (b)(3), 87 Stat. 954, 955; Oct. 4, 1976, Pub. L. 94-455, title XIX, 1903(a)(1), 90 Stat. 1806; Dec. 20, 1977, Pub. L. 95-216, title I, 101(a)(2), (b)(2), title III, 315(b), 317(b)(2), 91 Stat. 1511, 1512, 1537, 1540; Apr. 20, 1983, Pub. L. 98-21, title I, 123(a)(2), 97 Stat. 88; Dec. 22, 1987, Pub. L. 100-203, title IX, 9006(b)(1), 101 Stat. 1330-289; Nov. 10, 1988, Pub. L. 100-647, title VIII, 8016(a)(5), 102 Stat. 3793; Mar. 2, 2004, Pub. L. 108-203, Sec. 415, 118 Stat. 493; Pub. L. 111-147, Sec. 101(a), Mar. 18, 2010, 124 Stat. 71; Pub. L. 112-56, title II, Sec. 261(e)(2), Nov. 21, 2011, 125 Stat. 711; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(99)(B), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 114-113, Div. Q, title I, Sec. 121(c)(2); Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(208), (b)(34), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
Amendments to Subchapter
1976--Pub. L. 94-455, title XIX, 1903(b), Oct. 4, 1976, 90 Stat. 1810, struck out item 3113 “District of Columbia credit unions”.
1956--Act Aug. 1, 1956, ch. 836, title II, 201(a)(2), 70 Stat. 839, added item 3113.
AMENDMENTS
2018--Subsec. (e)(5)(B). Pub. L. 115-141, Div. U, Sec. 401(a)(208), amended subpar. (B) by inserting “the” before “meaning”.
Subsec. (d). Pub. L. 115-141, Div. U, Sec. 401(b)(34), struck subsec. (d). Before being, Subsec. (d) read as follows:
“(d) Special Exemption For Certain Individuals Hired In 2010.—
“(1) In General.—Subsection (a) shall not apply to wages paid by a qualified employer with respect to employment during the period beginning on the day after the date of the enactment of this subsection and ending on December 31, 2010, of any qualified individual for services performed—
“(A) in a trade or business of such qualified employer, or
“(B) in the case of a qualified employer exempt from tax under section 501(a), in furtherance of the activities related to the purpose or function constituting the basis of the employer's exemption under section 501.
“(2) Qualified Employer.—For purposes of this subsection—
“(A) In General.—The term ‘qualified employer’ means any employer other than the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing.
“(B) Treatment Of Employees Of Post-Secondary Educational Institutions.—Notwithstanding subparagraph (A), the term ‘qualified employer’ includes any employer which is a public institution of higher education (as defined in section 101(b) of the Higher Education Act of 1965).
“(3) Qualified Individual.—For purposes of this subsection, the term ‘qualified individual’ means any individual who—
“(A) begins employment with a qualified employer after February 3, 2010, and before January 1, 2011,
“(B) certifies by signed affidavit, under penalties of perjury, that such individual has not been employed for more than 40 hours during the 60-day period ending on the date such individual begins such employment,
“(C) is not employed by the qualified employer to replace another employee of such employer unless such other employee separated from employment voluntarily or for cause, and
“(D) is not an individual described in section 51(i)(1) (applied by substituting ‘qualified employer’ for ‘taxpayer’ each place it appears).
“(4) Election.—A qualified employer may elect to have this subsection not apply. Such election shall be made in such manner as the Secretary may require.
“(5) Special Rule For First Calendar Quarter Of 2010.—
“(A) Nonapplication Of Exemption During First Quarter.—Paragraph (1) shall not apply with respect to wages paid during the first calendar quarter of 2010.
“(B) Crediting Of First Quarter Exemption During Second Quarter.—The amount by which the tax imposed under subsection (a) would (but for subparagraph (A)) have been reduced with respect to wages paid by a qualified employer during the first calendar quarter of 2010 shall be treated as a payment against the tax imposed under subsection (a) with respect to the qualified employer for the second calendar quarter of 2010 which is made on the date that such tax is due.”
2015--Subsec. (f). Pub. L. 114-113, Div. Q, Sec. 121(c)(2), added subsec. (f).
2014--Subsec. (a). Pub. L. 113-295, Div. A, Sec. 221(a)(99)(B)(i), amended subsec. (a) by substituting “6.2 percent of the wages (as defined in section 3121(a)) received by the individual with respect to employment (as defined in section 3121(b))” for “the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b))--
 

In cases of wages paid during:              The rate shall be:

   1984, 1985, 1986, or 1987..................  5.7 percent
   1988 or 1989............................... 6.06 percent
   1990 or thereafter.........................  6.2 percent”
Subsec. (b). Pub. L. 113-295, Div. A, Sec. 221(a)(99)(B)(ii), amended subsec. (b) by substituting “1.45 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).” for “the following percentages of the wages (as defined in section 3121(a)) paid by him with respect to employment (as defined in section 3121(b))—
“(1) with respect to wages paid during the calendar years 1974 through 1977, the rate shall be 0.90 percent;
“(2) with respect to wages paid during the calendar year 1978, the rate shall be 1.00 percent;
“(3) with respect to wages paid during the calendar years 1979 and 1980, the rate shall be 1.05 percent;
“(4) with respect to wages paid during the calendar years 1981 through 1984, the rate shall be 1.30 percent;
“(5) with respect to wages paid during the calendar year 1985, the rate shall be 1.35 percent; and
“(6) with respect to wages paid after December 31, 1985, the rate shall be 1.45 percent.”
2011--Subsec. (e). Pub. L. 112-56, Sec. 261(e)(2), added subsec. (e).
2010--Subsec. (d). Pub. L. 111-147, Sec. 101(a), added subsec. (d).
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” after “under such agreement”.
1988--Subsecs. (a), (b). Pub. L. 100-647 made technical correction to directory language of Pub. L. 100-203, 9006(b)(1), see 1987 Amendment note below.
1987--Subsecs. (a), (b). Pub. L. 100-203, as amended by Pub. L. 100-647, struck out “and (t)” after “3121(a)” in introductory provisions.
1983--Subsec. (a). Pub. L. 98-21 substituted table of rates for pars. (1) to (7) which had imposed a tax on every employer (1) with respect to wages paid during the calendar years 1974 through 1977 at the rate of 4.95 percent, (2) with respect to wages paid during the calendar year 1978 at the rate of 5.05 percent, (3) with respect to wages paid during the calendar years 1979 and 1980 at the rate of 5.08 percent, (4) with respect to wages paid during the calendar year 1981 at the rate of 5.35 percent, (5) with respect to wages paid during the calendar years 1982 through 1984 at the rate of 5.40 percent, (6) with respect to wages paid during the calendar years 1985 through 1989 at the rate of 5.70 percent, and (7) with respect to wages paid after Dec. 31, 1989, at the rate of 6.20 percent.
1977--Subsec. (a). Pub. L. 95-216, 101(a)(2), 315(b), substituted “(as defined in section 3121(a) and (t))” for “(as defined in section 3121(a))” in provisions preceding par. (1), substituted “1974 through 1977” for “1974 through 2010” in par. (1), substituted “wages paid during the calendar year 1978, the rate shall be 5.05 percent” for “wages paid after December 31, 2010, the rate shall be 5.95 percent” in par. (2), and added pars. (3) to (7).
Subsec. (b). Pub. L. 95-216, 101(b)(2), 315(b), substituted “(as defined in section 3121(a) and (t))” for “(as defined in section 3121(a))" in provisions preceding par. (1), substituted “wages paid during the calendar year 1978, the rate shall be 1.00 percent” for “wages paid during the calendar years 1978 through 1980, the rate shall be 1.10 percent”, in par. (2), substituted “wages paid during the calendar years 1979 and 1980, the rate shall be 1.05 percent” for wages paid during the calendar years 1981 through 1985, the rate shall be 1.35 percent” in par. (3), substituted “wages paid during the calendar years 1981 through 1984, the rate shall be 1.30 percent” for “wages paid after December 31, 1985, the rate shall be 1.50 percent” in par. (4), and added pars. (5) and (6).
Subsec. (c). Pub. L. 95-216, 317(b)(2), added subsec. (c).
1976--Subsec. (a). Pub. L. 94-455, 1903(a)(1)(A), redesignated pars. (5) and (6) as (1) and (2). Former pars. (1) to (4), which related to a tax rate of 3.8 percent with respect to wages received during the taxable year 1968, a tax rate of 4.2 percent with respect to wages received during the calendar year 1969 and 1970, a tax rate of 4.6 percent with respect to wages received during the calendar years 1971 and 1972, and a tax rate of 4.85 percent with respect to wages received during the calendar year 1973, respectively, were struck out.
Subsec. (b). Pub. L. 94-455, 1903(a)(1)(B), redesignated pars. (3) to (6) as (1) to (4), respectively. Former pars. (1) and (2), which related to a tax rate of .60 percent with respect to wages received during the calendar years 1968, 1969, 1970, 1971, and 1972 and a tax rate of 1.0 percent with respect to wages received during the calendar year 1973, respectively, were struck out.
1973--Subsec. (a)(4). Pub. L. 93-233, 6(a)(2), struck out provision for application of 4.85 percent rate of tax during calendar years 1974, 1975, 1976, and 1977.
Subsec. (a)(5). Pub. L. 93-233, 6(a)(2), increased rate of tax from 4.80 percent to 4.95 percent and substituted calendar year “1974” to “1978" as initial year for application of such rate.
Subsec. (a)(6). Pub. L. 93-233, 6(a)(2), increased rate of tax from 5.85 percent to 5.95 percent.
Subsec. (b)(2). Pub. L. 93-233, 6(b)(3), struck out provision for application of 1.0 percent rate of tax during calendar years 1974, 1975, 1976, and 1977.
Subsec. (b)(3). Pub. L. 93-233, 6(b)(3), incorporated former provision of par. (2) for taxation of wages received during calendar years 1974, 1975, 1976, and 1977, decreased the applicable rate of tax from 1.0 percent to 0.90 percent, and struck out provision for 1.25 percent rate of tax for calendar years 1978, 1979, and 1980.
Subsec. (b)(4). Pub. L. 93-233, 6(b)(3), incorporated former provision of par. (3) for taxation of wages received during calendar years 1978, 1979, and 1980, decreased the applicable rate of tax from 1.25 percent to 1.10 percent, and struck out provision for 1.35 percent rate of tax for calendar years 1981, 1982, 1983, 1984, and 1985.
Subsec. (b)(5). Pub. L. 93-233, 6(b)(3), incorporated former provision of par. (4) for taxation of wages received during calendar years 1981 through 1985 at applicable 1.35 percent rate of tax and struck out provision for 1.45 percent rate of tax for wages received after Dec. 31, 1985.
Subsec. (b)(6). Pub. L. 93-233, 6(b)(3), incorporated former provision of par. (5) for taxation of wages received after Dec. 31, 1985 and increased the applicable rate of tax from 1.45 percent to 1.50 percent.
1972--Subsec. (a)(3). Pub. L. 92-603, 135(a)(3)(A), substituted “the calendar years 1971 and 1972” for “any of the calendar years 1971 through 1977”.
Subsec. (a)(3) to (5). Pub. L. 92-336, 204(a)(3), substituted “any of the calendar years 1971 through 1977” for “the calendar years 1971 and 1972” in par. (3), “any of the calendar years 1978 through 2010” for “the calendar years 1973, 1974, and 1975” and “4.5” for “5.0” in par. (4), and “December 31, 2010” for “December 31, 1975” and “5.35” for “5.15” in par. (5).
Subsec. (a)(4). Pub. L. 92-603, 135(a)(3)(B), substituted “received during the calendar years 1973, 1974, 1975, 1976, and 1977, the rate shall be 4.85 percent;” for “received during any of the calendar years 1978 through 2010, the rate shall be 4.5 percent; and”.
Subsec. (a)(5). Pub. L. 92-603, 135(a)(3)(B), substituted “received during the calendar years 1978 through 2010, the rate shall be 4.80 percent; and” for “received after December 31, 2010, the rate shall be 5.35 percent”.
Subsec. (a)(6). Pub. L. 92-603, 135(a)(3)(B), added par. (6).
Subsec. (b)(2). Pub. L. 92-603, 135(b)(3), increased rate to 1.0 percent from 0.9 percent.
Subsec. (b)(2) to (5). Pub. L. 92-336, 204(b)(3), inserted references to 1976 and 1977 and substituted “0.9” for “0.65” in par. (2), substituted references for the calendar years 1978 through 1985 for references to the calendar years 1976 through 1979 and substituted “1.0” for “0.70” in par. (3), substituted references for the calendar years 1986 through 1992 for references to the calendars 1980 through 1986 and substituted “1.1” for “0.80” in par. (4), and substituted “1992" and “1986” and “1.2” for “0.9” in par. (5).
Subsec. (b)(3). Pub. L. 92-603, 135(b)(3), substituted “and 1980, the rate shall be 1.25 percent” for “1980, 1981, 1982, 1983, 1984, and 1985, the rate shall be 1.0 percent”.
Subsec. (b)(4). Pub. L. 92-603, 135(b)(3), substituted “1981, 1982, 1983, 1984, and 1985, the rate shall be 1.35 percent” for “1986, 1987, 1988, 1989, 1990, 1991, and 1992, the rate shall be 1.1 percent”.
Subsec. (b)(5). Pub. L. 92-603, 135(b)(3), substituted “1985, the rate shall be 1.45 percent” for “1992, the rate shall be 1.2 percent”.
1971--Subsec. (a)(4). Pub. L. 92-5 substituted “with respect to wages paid during the calendar years 1973, 1974, and 1975, the rate shall be 5.0 percent; and” for “with respect to wages paid after December 31, 1972, the rate shall be 5.0 percent”.
Subsec. (a)(5). Pub. L. 92-5 added par. (5).
1968--Subsec. (a)(1) to (4). Pub. L. 90-248, 109(a)(3), substituted “1968” and “3.8” for “1966” and “3.85” in par. (1) and “1969 and 1970" and “4.2” for “1967 and 1968” and “3.9” in par. (2), struck out reference to calendar years 1969 and 1970 from par. (3) and substituted therein “4.6” for “4.4”, and substituted “5.0” for “4.85” in par. (4).
Subsecs. (b)(1) to (5). Pub. L. 90-248, 109(b)(3), struck out par. (1) provision for employer rate of 0.35 percent of wages paid with respect to employment during calendar year 1966, redesignated pars. (2) to (6) as (1) to (5), struck out reference to “1967” 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, 321(c), divided the total excise tax imposed under the entire section upon employers through a tax equal to percentages of wages paid by him 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 the tax for hospital insurance, but, in the case of subsec. (b), without regard to the provisions of section 3121(b)(9) insofar as it relates to employees; increased from 4-1/8 percent to 4.20 percent the rate of total tax imposed by the entire section upon wages paid during calendar year 1966 (resulting from a tax of 3.85 percent under subsec. (a) and 0.35 percent under subsec. (b)), increased from 4-1/8 percent to 4.40 percent the rate of total tax imposed by the entire section upon wages paid during calendar year 1967 (resulting from a tax of 3.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), reduced from 4-5/8 percent to 4.40 percent the rate of total tax imposed by the entire section upon wages paid during calendar year 1968 (resulting from a tax of 3.9 percent under subsec. (a) and 0.50 percent under subsec. (b)), increased from 4-5/8 percent to 4.90 percent the rate of total tax imposed by the entire section upon wages paid during the calendar years 1969, 1970, 1971, and 1972 (resulting from a tax of 4.4 percent under subsec. (a) and 0.50 percent under subsec. (b)), increased from 4-5/8 percent to 5.40 percent the rate for calendar years 1973, 1974, and 1975 (resulting from a tax of 4.85 percent under subsec. (a) and 0.55 percent under subsec. (b)), increased from 4-5/8 percent to 5.45 percent the rate for calendar years 1976, 1977, 1978, and 1979 (resulting from a tax of 4.85 percent under subsec. (a) and 0.60 percent under subsec. (b)), increased from 4-5/8 percent to 5.55 percent the rate for calendar years 1980 through 1986 (resulting from a tax of 4.85 percent under subsec. (a) and 0.70 percent under subsec. (b)), and increased the rate from 4-5/8 percent to 5.65 percent for calendar years after December 31, 1986 (resulting from a tax of 4.85 percent under subsec. (a) and 0.80 percent under subsec. (b)).
Subsec. (b). Pub. 89-97, 111(c)(6), struck out “,but without regard to the provisions of paragraph (9) thereof insofar as it relates to employees” after “as defined in section 3121(b)”.
1961--Pub. L. 87-64 increased rate of tax for calendar year 1962 from 3 to 3-1/8 percent, calendar years 1963 to 1965, inclusive, from 3-1/2 to 3-5/8 percent, calendar years 1966 and 1967 from 4 to 4-1/8 percent, calendar year 1968 from 4 to 4-5/8 percent, and for calendar years after December 31, 1968, from 4-1/2 to 4-5/8 percent.
1958--Pub. L. 85-840 increased rate of tax by substituting provisions imposing a tax of 2-1/2 percent for calendar year 1959, 3 percent for calendar years 1960-62, 3-1/2 percent for calendar years 1963-65, 4 percent for calendar years 1966-68, and 4-1/2 percent for calendar years beginning after Dec. 31, 1968, for provisions which imposed a tax of 2-1/4 percent for calendar years 1957-59, 2-3/4 percent for calendar years 1960-64, 3-1/4 percent for calendar years 1965-69, 3-3/4 percent for calendar years 1970-74, and 4-1/4 percent for calendar years beginning after Dec. 31, 1974.
1956--Act Aug. 1, 1956, increased rate of tax with respect to wages paid during calendar years 1957 to 1959, and for all calendar years thereafter, by one-quarter percent.
1954--Act Sept. 1, 1954, increased 3-1/4 percent rate of tax for calendar year 1970 and subsequent years to 3-1/2 percent for calendar years 1970 to 1974 and 4 percent for 1975 and subsequent years.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendments by Pub. L. 115-141, Div. U, Sec. 401(a)(208), (b)(34), effective March 23, 2018.
Sec. 401(e) of Pub. L. 115-141, Div. U, provided the following Savings Provision:
“(e) General Savings Provision With Respect To Deadwood Provisions.—If—
“(1) any provision amended or repealed by the amendments made by subsection (b) or (d) applied to—
“(A) any transaction occurring before the date of the enactment of this Act,
“(B) any property acquired before such date of enactment, or
“(C) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
“(2) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by such subsection) affect the liability for tax for periods ending after such 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 2015 AMENDMENTS
Amendment by Pub. L. 114-113, Div. Q, Sec. 121(c)(2), effective for taxable years beginning after December 31, 2015.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 221(a)(99)(B), 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 2011 AMENDMENTS
Amendment by Sec. 261(e)(2) of Pub. L. 112-56 effective for individuals who begin work for the employer after the date of the enactment of this Act [Enacted: Nov. 21, 2011].
EFFECTIVE DATE OF 2010 AMENDMENTS
Amendment by Sec. 101(a) of Pub. L. 111-147 effective for wages paid after the date of the enactment of this Act [Enacted: Mar. 18, 2010].
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendment by Sec. 415 of Pub. L. 108-203 effective on the date of the enactment of this Act [Enacted: Mar. 2, 2004].
EFFECTIVE DATE OF 1988 AMENDMENTS
Section 8016(b) of Pub. L. 100-647 provided that:
“(1) Except as provided in paragraph (2), the amendments made by this section [amending sections 3111, 3121, and 3306 of this title and sections 405, 410, and 411 of Title 42, The Public Health and Welfare] shall be effective on the date of the enactment of this Act [Nov. 10, 1988].
“(2) Any amendment made by this section to a provision of a particular Public Law which is referred to by its number, or to a provision of the Social Security Act [42 U.S.C. 301 et seq.] or the Internal Revenue Code of 1986 as added or amended by a provision of a particular Public Law which is so referred to, shall be effective as though it had been included or reflected in the relevant provisions of that Public Law at the time of its enactment.”
EFFECTIVE DATE OF 1987 AMENDMENTS
Section 9006(c) of Pub. L. 100-203 provided that: “The amendments made by this section [amending sections 3111 and 3121 of this title] shall apply with respect to tips received (and wages paid) on and after January 1, 1988.”
EFFECTIVE DATE OF 1983 AMENDMENTS
Amendment by Pub. L. 98-21 applicable to remuneration paid after Dec. 31, 1983, see section 123(a)(3) of Pub. L. 98-21, set out as a note under section 3101 of this title.
EFFECTIVE DATE OF 1977 AMENDMENTS
Amendment by section 101(a)(2), (b)(2) of Pub. L. 95-216 applicable with respect to remuneration paid or received, and taxable years beginning, after 1977, see section 104 of Pub. L. 95-216, set out as a note under section 1401 of this title.
Section 315(c) of Pub. L. 95-216 provided that: “The amendments made by this section [amending this section and section 3121 of this title] shall apply with respect to wages paid with respect to employment performed in months after December 1977.”
EFFECTIVE DATE OF 1976 AMENDMENTS
Amendment by Pub. L. 94-455 applicable with respect to wages paid after Dec. 31, 1976, see section 1903(d) of Pub. L. 94-455, set out as a note under section 3101 of this title.
EFFECTIVE DATE OF 1973 AMENDMENTS
Amendment by Pub. L. 93-233 applicable only with respect to remuneration paid after December 31, 1973, see section 6(c) of Pub. L. 93-233, set out as a note under section 1401 of this title.
EFFECTIVE DATE OF 1972 AMENDMENTS
Amendment by Pub. L. 92-603 applicable only with respect to the remuneration paid after Dec. 31, 1972, see section 135(c) of Pub. L. 92-603, set out as a note under section 1401 of this title.
Amendment by Pub. L. 92-336 applicable only with respect to remuneration paid after December 31, 1972, see section 204(c) of Pub. L. 92-336, set out as a note under section 1401 of this title.
EFFECTIVE DATE OF 1971 AMENDMENTS
Amendment by Pub. L. 92-5 applicable only with respect to remuneration paid after Dec. 31, 1971, see section 204(b) of Pub. L. 92-5, set out as a note under section 3101 of this title.
EFFECTIVE DATE OF 1968 AMENDMENTS
Amendment by Pub. L. 90-248 applicable only with respect to remuneration paid after Dec. 31, 1967, see section 109(c) of Pub. L. 90-248, set out as a note under section 1401 of this title.
EFFECTIVE DATE OF 1965 AMENDMENTS
Amendment by section 111(c)(6) 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.
Amendment by section 321(c) of Pub. L. 89-97 applicable with respect to remuneration paid after December 31, 1965, see section 321(d) of Pub. L. 89-97, set out as a note under section 1401 of this title.
EFFECTIVE DATE OF 1961 AMENDMENTS
Amendment by Pub. L. 87-64 applicable with respect to remuneration paid after Dec. 31, 1961, see section 201(d) of Pub. L. 87-64, set out as a note under section 1401 of this title.
EFFECTIVE DATE OF 1958 AMENDMENTS
Amendment by Pub. L. 85-840 applicable with respect to remuneration paid after Dec. 31, 1958, see section 401(d) of Pub. L. 85-840, set out as a note under section 1401 of this title.
EFFECTIVE DATE OF 1956 AMENDMENTS
Amendment by act Aug. 1, 1956, applicable with respect to remuneration paid after Dec. 31, 1956, see section 202(d) of such act Aug. 1, 1956, set out as a note under section 1401 of this title.
ROLLOVER OF AMOUNTS RECEIVED IN AIRLINE CARRIER BANKRUPTCY
Section 1106 of Pub. L. 112-95, as amended by Pub. L. 113-243, Sec. 1, provided that:
“(a) GENERAL RULES.—
“(1) ROLLOVER OF AIRLINE PAYMENT AMOUNT.—If a qualified airline employee receives any airline payment amount and transfers any portion of such amount to a traditional IRA within 180 days of receipt of such amount (or, if later, within 180 days of the date of the enactment of this Act), then such amount (to the extent so transferred) shall be treated as a rollover contribution described in section 402(c) of the Internal Revenue Code of 1986. A qualified airline employee making such a transfer may exclude from gross income the amount transferred, in the taxable year in which the airline payment amount was paid to the qualified airline employee by the commercial passenger airline carrier.
“(2) TRANSFER OF AMOUNTS ATTRIBUTABLE TO AIRLINE PAYMENT AMOUNT FOLLOWING ROLLOVER TO ROTH IRA.—A qualified airline employee who has contributed an airline payment amount to a Roth IRA that is treated as a qualified rollover contribution pursuant to section 125 of the Worker, Retiree, and Employer Recovery Act of 2008, may transfer to a traditional IRA, in a trustee-to-trustee transfer, all or any part of the contribution (together with any net income allocable to such contribution), and the transfer to the traditional IRA will be deemed to have been made at the time of the rollover to the Roth IRA, if such transfer is made within 180 days of the date of the enactment of this Act. A qualified airline employee making such a transfer may exclude from gross income the airline payment amount previously rolled over to the Roth IRA, to the extent an amount attributable to the previous rollover was transferred to a traditional IRA, in the taxable year in which the airline payment amount was paid to the qualified airline employee by the commercial passenger airline carrier. No amount so transferred to a traditional IRA may be treated as a qualified rollover contribution with respect to a Roth IRA within the 5-taxable year period beginning with the taxable year in which such transfer was made.
“(3) EXTENSION OF TIME TO FILE CLAIM FOR REFUND.—A qualified airline employee who excludes an amount from gross income in a prior taxable year under paragraph (1) or (2) may reflect such exclusion in a claim for refund filed within the period of limitation under section 6511(a) of such Code (or, if later, April 15, 2015).
“(4) OVERALL LIMITATION ON AMOUNTS TRANSFERRED TO TRADITIONAL IRAS.—
“(A) IN GENERAL.—The aggregate amount of airline payment amounts which may be transferred to 1 or more traditional IRAs under paragraphs (1) and (2) with respect to any qualified employee for any taxable year shall not exceed the excess (if any) of—
“(i) 90 percent of the aggregate airline payment amounts received by the qualified airline employee during the taxable year and all preceding taxable years, over
“(ii) the aggregate amount of such transfers to which paragraphs (1) and (2) applied for all preceding taxable years.
“(B) SPECIAL RULES.—For purposes of applying the limitation under subparagraph (A)—
“(i) any airline payment amount received by the surviving spouse of any qualified employee, and any amount transferred to a traditional IRA by such spouse under subsection (d), shall be treated as an amount received or transferred by the qualified employee, and
“(ii) any amount transferred to a traditional IRA which is attributable to net income described in paragraph (2) shall not be taken into account.
“(5) COVERED EXECUTIVES NOT ELIGIBLE TO MAKE TRANSFERS.—Paragraphs (1) and (2) shall not apply to any transfer by a qualified airline employee (or any transfer authorized under subsection (d) by a surviving spouse of the qualified airline employee) if at any time during the taxable year of the transfer or any preceding taxable year the qualified airline employee held a position described in subparagraph (A) or (B) of section 162(m)(3) with the commercial passenger airline carrier from whom the airline payment amount was received.
“(6) SPECIAL RULE FOR CERTAIN AIRLINE PAYMENT AMOUNTS.—In the case of any amount which became an airline payment amount by reason of the amendments made by section 1(b) of Public Law 113-243 (26 U.S.C. 408 note), paragraph (1) shall be applied by substituting “(or, if later, within the period beginning on December 18, 2014, and ending on the date which is 180 days after the date of enactment of the Protecting Americans from Tax Hikes Act of 2015)” for “(or, if later, within 180 days of the date of the enactment of this Act)”.
“(b) TREATMENT OF AIRLINE PAYMENT AMOUNTS AND TRANSFERS FOR EMPLOYMENT TAXES.—For purposes of chapter 21 of the Internal Revenue Code of 1986 and section 209 of the Social Security Act, an airline payment amount shall not fail to be treated as a payment of wages by the commercial passenger airline carrier to the qualified airline employee in the taxable year of payment because such amount is excluded from the qualified airline employee's gross income under subsection (a).
“(c) DEFINITIONS AND SPECIAL RULES.—For purposes of this section—
“(1) AIRLINE PAYMENT AMOUNT.—
“(A) IN GENERAL.—The term “airline payment amount” means any payment of any money or other property which is payable by a commercial passenger airline carrier to a qualified airline employee—
“(i) under the approval of an order of a Federal bankruptcy court in a case filed after September 11, 2001, and before January 1, 2007, or filed on November 29, 2011, and
“(ii) in respect of the qualified airline employee's interest in a bankruptcy claim against the carrier, any note of the carrier (or amount paid in lieu of a note being issued), or any other fixed obligation of the carrier to pay a lump sum amount. The amount of such payment shall be determined without regard to any requirement to deduct and withhold tax from such payment under sections 3102(a) of the Internal Revenue Code of 1986 and 3402(a) of such Code.
“(B) EXCEPTION.—An airline payment amount shall not include any amount payable on the basis of the carrier's future earnings or profits.
“(2) QUALIFIED AIRLINE EMPLOYEE.—The term “qualified airline employee” means an employee or former employee of a commercial passenger airline carrier who was a participant in a defined benefit plan maintained by the carrier which—
“(A) is a plan described in section 401(a) of the Internal Revenue Code of 1986 which includes a trust exempt from tax under section 501(a) of such Code, and
“(B) was terminated, became subject to the restrictions contained in paragraphs (2) and (3) of section 402(b) of the Pension Protection Act of 2006, or was frozen effective November 1, 2012.
“(3) TRADITIONAL IRA.—The term “traditional IRA” means an individual retirement plan (as defined in section 7701(a)(37) of the Internal Revenue Code of 1986) which is not a Roth IRA.
“(4) ROTH IRA.—The term “Roth IRA” has the meaning given such term by section 408A(b) of such Code.
“(d) SURVIVING SPOUSE.—If a qualified airline employee died after receiving an airline payment amount, or if an airline payment amount was paid to the surviving spouse of a qualified airline employee in respect of the qualified airline employee, the surviving spouse of the qualified airline employee may take all actions permitted under section 125 of the Worker, Retiree and Employer Recovery Act of 2008, or under this section, to the same extent that the qualified airline employee could have done had the qualified airline employee survived.
“(e) EFFECTIVE DATE.—This section shall apply to transfers made after the date of the enactment of this Act with respect to airline payment amounts paid before, on, or after such date.”
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 Code of 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).”
PENALTIES AND INTEREST NOT ASSESSED FOR FAILURE TO MAKE TIMELY PAYMENT DURING PERIOD JANUARY 1, 1982, TO JUNE 30, 1982, OF TAXES ATTRIBUTABLE TO AMENDMENTS BY PUB. L. 97-123
For provision that no penalties or interest shall be assessed on account of any failure to make timely payment of taxes imposed by this section with respect to payments made for the period Jan. 1, 1982, and ending June 30, 1982, to the extent that such taxes are attributable to section 3 of Pub. L. 97-123 or the amendments made by that section, see section 3(f) of Pub. L. 97-123, set out as a note under section 3101 of this title.