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Internal Revenue Code, § 3121. Definitions

I.R.C. § 3121(a) Wages
For purposes of this chapter, the term “wages” means all remuneration for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash; except that such term shall not include—
I.R.C. § 3121(a)(1)
in the case of the taxes imposed by sections 3101(a) and 3111(a) that part of the remuneration which, after remuneration (other than remuneration referred to in the succeeding paragraphs of this subsection) equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) with respect to employment has been paid to an individual by an employer during the calendar year with respect to which such contribution and benefit base is effective, is paid to such individual by such employer during such calendar year. If an employer (hereinafter referred to as successor employer) during any calendar year acquires substantially all the property used in a trade or business of another employer (hereinafter referred to as a predecessor), or used in a separate unit of a trade or business of a predecessor, and immediately after the acquisition employs in his trade or business an individual who immediately prior to the acquisition was employed in the trade or business of such predecessor, then, for the purpose of determining whether the successor employer has paid remuneration (other than remuneration referred to in the succeeding paragraphs of this subsection) with respect to employment equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) to such individual during such calendar year, any remuneration (other than remuneration referred to in the succeeding paragraphs of this subsection) with respect to employment paid (or considered under this paragraph as having been paid) to such individual by such predecessor during such calendar year and prior to such acquisition shall be considered as having been paid by such successor employer;
I.R.C. § 3121(a)(2)
the amount of any payment (including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment) made to, or on behalf of, an employee or any of his dependents under a plan or system established by an employer which makes provision for his employees generally (or for his employees generally and their dependents) or for a class or classes of his employees (or for a class or classes of his employees and their dependents), on account of—
I.R.C. § 3121(a)(2)(A)
sickness or accident disability (but, in the case of payments made to an employee or any of his dependents, this subparagraph shall exclude from the term “wages” only payments which are received under a workman's compensation law), or
I.R.C. § 3121(a)(2)(B)
medical or hospitalization expenses in connection with sickness or accident disability, or
I.R.C. § 3121(a)(2)(C)
death, except that this paragraph does not apply to a payment for group-term life insurance to the extent that such payment is includible in the gross income of the employee;
I.R.C. § 3121(a)(3)
[Repealed. Pub. L. 98-21, title III, 324(a)(3)(B), Apr. 20, 1983, 97 Stat. 123]
I.R.C. § 3121(a)(4)
any payment on account of sickness or accident disability, or medical or hospitalization expenses in connection with sickness or accident disability, made by an employer to, or on behalf of, an employee after the expiration of 6 calendar months following the last calendar month in which the employee worked for such employer;
I.R.C. § 3121(a)(5)
any payment made to, or on behalf of, an employee or his beneficiary—
I.R.C. § 3121(a)(5)(A)
from or to a trust described in section 401(a) which is exempt from tax under section 501(a) at the time of such payment unless such payment is made to an employee of the trust as remuneration for services rendered as such employee and not as a beneficiary of the trust,
I.R.C. § 3121(a)(5)(B)
under or to an annuity plan which, at the time of such payment, is a plan described in section 403(a),
I.R.C. § 3121(a)(5)(C)
under a simplified employee pension (as defined in section 408(k)(1)), other than any contributions described in section 408(k)(6),
I.R.C. § 3121(a)(5)(D)
under or to an annuity contract described in section 403(b), other than a payment for the purchase of such contract which is made by reason of a salary reduction agreement (whether evidenced by a written instrument or otherwise),
I.R.C. § 3121(a)(5)(E)
under or to an exempt governmental deferred compensation plan (as defined in subsection (v)(3)),
I.R.C. § 3121(a)(5)(F)
to supplement pension benefits under a plan or trust described in any of the foregoing provisions of this paragraph to take into account some portion or all of the increase in the cost of living (as determined by the Secretary of Labor) since retirement but only if such supplemental payments are under a plan which is treated as a welfare plan under section 3(2)(B)(ii) of the Employee Retirement Income Security Act of 1974,
I.R.C. § 3121(a)(5)(G)
under a cafeteria plan (within the meaning of section 125) if such payment would not be treated as wages without regard to such plan and it is reasonable to believe that (if section 125 applied for purposes of this section) section 125 would not treat any wages as constructively received,
I.R.C. § 3121(a)(5)(H)
under an arrangement to which section 408(p) applies, other than any elective contributions under paragraph (2)(A)(i) thereof, or
I.R.C. § 3121(a)(5)(I)
under a plan described in section 457(e)(11)(A)(ii) and maintained by an eligible employer (as defined in section 457(e)(1));
I.R.C. § 3121(a)(6)
the payment by an employer (without deduction from the remuneration of the employee)—
I.R.C. § 3121(a)(6)(A)
of the tax imposed upon an employee under section 3101, or
I.R.C. § 3121(a)(6)(B)
of any payment required from an employee under a State unemployment compensation law,
with respect to remuneration paid to an employee for domestic service in a private home of the employer or for agricultural labor;
I.R.C. § 3121(a)(7)
I.R.C. § 3121(a)(7)(A)
remuneration paid in any medium other than cash to an employee for service not in the course of the employer's trade or business or for domestic service in a private home of the employer;
I.R.C. § 3121(a)(7)(B)
cash remuneration paid by an employer in any calendar year to an employee for domestic service in a private home of the employer (including domestic service on a farm operated for profit), if the cash remuneration paid in such year by the employer to the employee for such service is less than the applicable dollar threshold (as defined in subsection (x)) for such year;
I.R.C. § 3121(a)(7)(C)
cash remuneration paid by an employer in any calendar year to an employee for service not in the course of the employer's trade or business, if the cash remuneration paid in such year by the employer to the employee for such service is less than $100. As used in this subparagraph, the term “service not in the course of the employer's trade or business” does not include domestic service in a private home of the employer and does not include service described in subsection (g)(5);
I.R.C. § 3121(a)(8)
I.R.C. § 3121(a)(8)(A)
remuneration paid in any medium other than cash for agricultural labor;
I.R.C. § 3121(a)(8)(B)
cash remuneration paid by an employer in any calendar year to an employee for agricultural labor unless—
I.R.C. § 3121(a)(8)(B)(i)
the cash remuneration paid in such year by the employer to the employee for such labor is $150 or more, or
I.R.C. § 3121(a)(8)(B)(ii)
the employer's expenditures for agricultural labor in such year equal or exceed $2,500,
except that clause (ii) shall not apply in determining whether remuneration paid to an employee constitutes “wages” under this section if such employee (I) is employed as a hand harvest laborer and is paid on a piece rate basis in an operation which has been, and is customarily and generally recognized as having been, paid on a piece rate basis in the region of employment, (II) commutes daily from his permanent residence to the farm on which he is so employed, and (III) has been employed in agriculture less than 13 weeks during the preceding calendar year;
I.R.C. § 3121(a)(9)
[Repealed. Pub. L. 98-21, title III, 324(a)(3)(B), Apr. 20, 1983, 97 Stat. 123]
I.R.C. § 3121(a)(10)
remuneration paid by an employer in any calendar year to an employee for service described in subsection (d)(3)(C) (relating to home workers), if the cash remuneration paid in such year by the employer to the employee for such service is less than $100;
I.R.C. § 3121(a)(11)
remuneration paid to or on behalf of an employee if (and to the extent that) at the time of the payment of such remuneration it is reasonable to believe that a corresponding deduction is allowable under section 217 (determined without regard to section 274(n));
I.R.C. § 3121(a)(12)
I.R.C. § 3121(a)(12)(A)
tips paid in any medium other than cash;
I.R.C. § 3121(a)(12)(B)
cash tips received by an employee in any calendar month in the course of his employment by an employer unless the amount of such cash tips is $20 or more;
I.R.C. § 3121(a)(13)
any payment or series of payments by an employer to an employee or any of his dependents which is paid--
I.R.C. § 3121(a)(13)(A)
upon or after the termination of an employee's employment relationship because of (i) death, or (ii) retirement for disability, and
I.R.C. § 3121(a)(13)(B)
under a plan established by the employer which makes provision for his employees generally or a class or classes of his employees (or for such employees or class or classes of employees and their dependents),
other than any such payment or series of payments which would have been paid if the employee's employment relationship had not been so terminated;
I.R.C. § 3121(a)(14)
any payment made by an employer to a survivor or the estate of a former employee after the calendar year in which such employee died;
I.R.C. § 3121(a)(15)
any payment made by an employer to an employee, if at the time such payment is made such employee is entitled to disability insurance benefits under section 223(a) of the Social Security Act and such entitlement commenced prior to the calendar year in which such payment is made, and if such employee did not perform any services for such employer during the period for which such payment is made;
I.R.C. § 3121(a)(16)
remuneration paid by an organization exempt from income tax under section 501(a) (other than an organization described in section 401(a)) or under section 521 in any calendar year to an employee for service rendered in the employ of such organization, if the remuneration paid in such year by the organization to the employee for such service is less than $100;
I.R.C. § 3121(a)(17)
[Repealed. Pub. L. 113-295, Div. A, title II, Sec. 221(a)(19)(B)(iv), Dec. 19, 2014].
I.R.C. § 3121(a)(18)
any payment made, or benefit furnished, to or for the benefit of an employee if at the time of such payment or such furnishing it is reasonable to believe that the employee will be able to exclude such payment or benefit from income under section 127, 129, 134(b)(4), or 134(b)(5);
I.R.C. § 3121(a)(19)
the value of any meals or lodging furnished by or on behalf of the employer if at the time of such furnishing it is reasonable to believe that the employee will be able to exclude such items from income under section 119;
I.R.C. § 3121(a)(20)
any benefit provided to or on behalf of an employee if at the time such benefit is provided it is reasonable to believe that the employee will be able to exclude such benefit from income under section 74(c), 108(f)(4), 117, or 132;
I.R.C. § 3121(a)(21)
in the case of a member of an Indian tribe, any remuneration on which no tax is imposed by this chapter by reason of section 7873 (relating to income derived by Indians from exercise of fishing rights);
I.R.C. § 3121(a)(22)
remuneration on account of—
I.R.C. § 3121(a)(22)(A)
a transfer of a share of stock to any individual pursuant to an exercise of an incentive stock option (as defined in section 422(b)) or under an employee stock purchase plan (as defined in section 423(b)), or
I.R.C. § 3121(a)(22)(B)
any disposition by the individual of such stock; or
I.R.C. § 3121(a)(23)
any benefit or payment which is excludable from the gross income of the employee under section 139B(b).
Nothing in the regulations prescribed for purposes of chapter 24 (relating to income tax withholding) which provides an exclusion from “wages” as used in such chapter shall be construed to require a similar exclusion from “wages” in the regulations prescribed for purposes of this chapter. Except as otherwise provided in regulations prescribed by the Secretary, any third party which makes a payment included in wages solely by reason of the parenthetical matter contained in subparagraph (A) of paragraph (2) shall be treated for purposes of this chapter and chapter 22 as the employer with respect to such wages.
I.R.C. § 3121(b) Employment
For purposes of this chapter, the term “employment" means any service, of whatever nature, performed (A) by an employee for the person employing him, irrespective of the citizenship or residence of either, (i) within the United States, or (ii) on or in connection with an American vessel or American aircraft under a contract of service which is entered into within the United States or during the performance of which and while the employee is employed on the vessel or aircraft it touches at a port in the United States, if the employee is employed on and in connection with such vessel or aircraft when outside the United States, or (B) outside the United States by a citizen or resident of the United States as an employee for an American employer (as defined in subsection (h)), or (C) if it is service, regardless of where or by whom performed, which is designated as employment or recognized as equivalent to employment under an agreement entered into under section 233 of the Social Security Act; except that such term shall not include—
I.R.C. § 3121(b)(1)
service performed by foreign agricultural workers lawfully admitted to the United States from the Bahamas, Jamaica, and the other British West Indies, or from any other foreign country or possession thereof, on a temporary basis to perform agricultural labor;
I.R.C. § 3121(b)(2)
domestic service performed in a local college club, or local chapter of a college fraternity or sorority, by a student who is enrolled and is regularly attending classes at a school, college, or university;
I.R.C. § 3121(b)(3)
I.R.C. § 3121(b)(3)(A)
service performed by a child under the age of 18 in the employ of his father or mother;
I.R.C. § 3121(b)(3)(B)
service not in the course of the employer's trade or business, or domestic service in a private home of the employer, performed by an individual under the age of 21 in the employ of his father or mother, or performed by an individual in the employ of his spouse or son or daughter; except that the provisions of this subparagraph shall not be applicable to such domestic service performed by an individual in the employ of his son or daughter if—
I.R.C. § 3121(b)(3)(B)(i)
the employer is a surviving spouse or a divorced individual and has not remarried, or has a spouse living in the home who has a mental or physical condition which results in such spouse's being incapable of caring for a son, daughter, stepson, or stepdaughter (referred to in clause (ii)) for at least 4 continuous weeks in the calendar quarter in which the service is rendered, and
I.R.C. § 3121(b)(3)(B)(ii)
a son, daughter, stepson, or stepdaughter of such employer is living in the home, and
I.R.C. § 3121(b)(3)(B)(iii)
the son, daughter, stepson, or stepdaughter (referred to in clause (ii)) has not attained age 18 or has a mental or physical condition which requires the personal care and supervision of an adult for at least 4 continuous weeks in the calendar quarter in which the service is rendered;
I.R.C. § 3121(b)(4)
service performed by an individual on or in connection with a vessel not an American vessel, or on or in connection with an aircraft not an American aircraft, if (A) the individual is employed on and in connection with such vessel or aircraft, when outside the United States and (B)(i) such individual is not a citizen of the United States or (ii) the employer is not an American employer;
I.R.C. § 3121(b)(5)
service performed in the employ of the United States or any instrumentality of the United States, if such service—
I.R.C. § 3121(b)(5)(A)
would be excluded from the term “employment” for purposes of this title if the provisions of paragraphs (5) and (6) of this subsection as in effect in January 1983 had remained in effect, and
I.R.C. § 3121(b)(5)(B)
is performed by an individual who—
I.R.C. § 3121(b)(5)(B)(i)
has been continuously performing service described in subparagraph (A) since December 31, 1983, and for purposes of this clause—
I.R.C. § 3121(b)(5)(B)(i)(I)
if an individual performing service described in subparagraph (A) returns to the performance of such service after being separated therefrom for a period of less than 366 consecutive days, regardless of whether the period began before, on, or after December 31, 1983, then such service shall be considered continuous,
I.R.C. § 3121(b)(5)(B)(i)(II)
if an individual performing service described in subparagraph (A) returns to the performance of such service after being detailed or transferred to an international organization as described under section 3343 of subchapter III of chapter 33 of title 5, United States Code, or under section 3581 of chapter 35 of such title, then the service performed for that organization shall be considered service described in subparagraph (A),
I.R.C. § 3121(b)(5)(B)(i)(III)
if an individual performing service described in subparagraph (A) is reemployed or reinstated after being separated from such service for the purpose of accepting employment with the American Institute in Taiwan as provided under section 3310 of chapter 48 of title 22, United States Code, then the service performed for that Institute shall be considered service described in subparagraph (A),
I.R.C. § 3121(b)(5)(B)(i)(IV)
if an individual performing service described in subparagraph (A) returns to the performance of such service after performing service as a member of a uniformed service (including, for purposes of this clause, service in the National Guard and temporary service in the Coast Guard Reserve) and after exercising restoration or reemployment rights as provided under chapter 43 of title 38, United States Code, then the service so performed as a member of a uniformed service shall be considered service described in subparagraph (A), and
I.R.C. § 3121(b)(5)(B)(i)(V)
if an individual performing service described in subparagraph (A) returns to the performance of such service after employment (by a tribal organization) to which section 104(e)(2) of the Indian Self-Determination Act applies, then the service performed for that tribal organization shall be considered service described in subparagraph (A); or
I.R.C. § 3121(b)(5)(B)(ii)
is receiving an annuity from the Civil Service Retirement and Disability Fund, or benefits (for service as an employee) under another retirement system established by a law of the United States for employees of the Federal Government (other than for members of the uniformed service);
except that this paragraph shall not apply with respect to any such service performed on or after any date on which such individual performs—
I.R.C. § 3121(b)(5)(C)
service performed as the President or Vice President of the United States,
I.R.C. § 3121(b)(5)(D)
service performed—
I.R.C. § 3121(b)(5)(D)(i)
in a position placed in the Executive Schedule under sections 5312 through 5317 of title 5, United States Code,
I.R.C. § 3121(b)(5)(D)(ii)
as a noncareer appointee in the Senior Executive Service or a noncareer member of the Senior Foreign Service, or
I.R.C. § 3121(b)(5)(D)(iii)
in a position to which the individual is appointed by the President (or his designee) or the Vice President under section 105(a)(1), 106(a)(1), or 107(a)(1) or (b)(1) of title 3, United States Code, if the maximum rate of basic pay for such position is at or above the rate for level V of the Executive Schedule,
I.R.C. § 3121(b)(5)(E)
service performed as the Chief Justice of the United States, an Associate Justice of the Supreme Court, a judge of a United States court of appeals, a judge of a United States district court (including the district court of a territory), a judge of the United States Court of Federal Claims, a judge of the United States Court of International Trade, a judge of the United States Tax Court, a United States magistrate judge, or a referee in bankruptcy or United States bankruptcy judge,
I.R.C. § 3121(b)(5)(F)
service performed as a Member, Delegate, or Resident Commissioner of or to the Congress,
I.R.C. § 3121(b)(5)(G)
any other service in the legislative branch of the Federal Government if such service—
I.R.C. § 3121(b)(5)(G)(i)
is performed by an individual who was not subject to subchapter III of chapter 83 of title 5, United States Code, or to another retirement system established by a law of the United States for employees of the Federal Government (other than for members of the uniformed services), on December 31, 1983, or
I.R.C. § 3121(b)(5)(G)(ii)
is performed by an individual who has, at any time after December 31, 1983, received a lump-sum payment under section 8342(a) of title 5, United States Code, or under the corresponding provision of the law establishing the other retirement system described in clause (i), or
I.R.C. § 3121(b)(5)(G)(iii)
is performed by an individual after such individual has otherwise ceased to be subject to subchapter III of chapter 83 of title 5, United States Code (without having an application pending for coverage under such subchapter), while performing service in the legislative branch (determined without regard to the provisions of subparagraph (B) relating to continuity of employment), for any period of time after December 31, 1983,
and for purposes of this subparagraph (G) an individual is subject to such subchapter III or to any such other retirement system at any time only if (a) such individual's pay is subject to deductions, contributions, or similar payments (concurrent with the service being performed at that time) under section 8334(a) of such title 5 or the corresponding provision of the law establishing such other system, or (in a case to which section 8332(k)(1) of such title applies) such individual is making payments of amounts equivalent to such deductions, contributions, or similar payments while on leave without pay, or (b) such individual is receiving an annuity from the Civil Service Retirement and Disability Fund, or is receiving benefits (for service as an employee) under another retirement system established by a law of the United States for employees of the Federal Government (other than for members of the uniformed services), or
I.R.C. § 3121(b)(5)(H)
service performed by an individual—
I.R.C. § 3121(b)(5)(H)(i)
on or after the effective date of an election by such individual, under section 301 of the Federal Employees' Retirement System Act of 1986, section 307 of the Central Intelligence Agency Retirement Act (50 U.S.C. 2157), or the Federal Employees' Retirement System Open Enrollment Act of 1997, to become subject to the Federal Employees' Retirement System provided in chapter 84 of title 5, United States Code, or
I.R.C. § 3121(b)(5)(H)(ii)
on or after the effective date of an election by such individual, under regulations issued under section 860 of the Foreign Service Act of 1980, to become subject to the Foreign Service Pension System provided in subchapter II of chapter 8 of title I of such Act;
I.R.C. § 3121(b)(6)
service performed in the employ of the United States or any instrumentality of the United States if such service is performed—
I.R.C. § 3121(b)(6)(A)
in a penal institution of the United States by an inmate thereof;
I.R.C. § 3121(b)(6)(B)
by any individual as an employee included under section 5351(2) of title 5, United States Code (relating to certain interns, student nurses, and other student employees of hospitals of the Federal Government), other than as a medical or dental intern or a medical or dental resident in training; or
I.R.C. § 3121(b)(6)(C)
by any individual as an employee serving on a temporary basis in case of fire, storm, earthquake, flood, or other similar emergency;
I.R.C. § 3121(b)(7)
service performed in the employ of a State, or any political subdivision thereof, or any instrumentality of any one or more of the foregoing which is wholly owned thereby, except that this paragraph shall not apply in the case of—
I.R.C. § 3121(b)(7)(A)
service which, under subsection (j), constitutes covered transportation service,
I.R.C. § 3121(b)(7)(B)
service in the employ of the Government of Guam or the Government of American Samoa or any political subdivision thereof, or of any instrumentality of any one or more of the foregoing which is wholly owned thereby, performed by an officer or employee thereof (including a member of the legislature of any such Government or political subdivision), and, for purposes of this title with respect to the taxes imposed by this chapter—
I.R.C. § 3121(b)(7)(B)(i)
any person whose service as such an officer or employee is not covered by a retirement system established by a law of the United States shall not, with respect to such service, be regarded as an employee of the United States or any agency or instrumentality thereof, and
I.R.C. § 3121(b)(7)(B)(ii)
the remuneration for service described in clause (i) (including fees paid to a public official) shall be deemed to have been paid by the Government of Guam or the Government of American Samoa or by a political subdivision thereof or an instrumentality of any one or more of the foregoing which is wholly owned thereby, whichever is appropriate,
I.R.C. § 3121(b)(7)(C)
service performed in the employ of the District of Columbia or any instrumentality which is wholly owned thereby, if such service is not covered by a retirement system established by a law of the United States (other than the Federal Employees Retirement System provided in chapter 84 of title 5, United States Code); except that the provisions of this subparagraph shall not be applicable to service performed—
I.R.C. § 3121(b)(7)(C)(i)
in a hospital or penal institution by a patient or inmate thereof;
I.R.C. § 3121(b)(7)(C)(ii)
by any individual as an employee included under section 5351(2) of title 5, United States Code (relating to certain interns, student nurses, and other student employees of hospitals of the District of Columbia Government), other than as a medical or dental intern or as a medical or dental resident in training;
I.R.C. § 3121(b)(7)(C)(iii)
by any individual as an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood or other similar emergency; or
I.R.C. § 3121(b)(7)(C)(iv)
by a member of a board, committee, or council of the District of Columbia, paid on a per diem, meeting, or other fee basis,
I.R.C. § 3121(b)(7)(D)
service performed in the employ of the Government of Guam (or any instrumentality which is wholly owned by such Government) by an employee properly classified as a temporary or intermittent employee, if such service is not covered by a retirement system established by a law of Guam; except that (i) the provisions of this subparagraph shall not be applicable to services performed by an elected official or a member of the legislature or in a hospital or penal institution by a patient or inmate thereof, and (ii) for purposes of this subparagraph, clauses (i) and (ii) of subparagraph (B) shall apply,
I.R.C. § 3121(b)(7)(E)
service included under an agreement entered into pursuant to section 218 of the Social Security Act, or
I.R.C. § 3121(b)(7)(F)
service in the employ of a State (other than the District of Columbia, Guam, or American Samoa), of any political subdivision thereof, or of any instrumentality of any one or more of the foregoing which is wholly owned thereby, by an individual who is not a member of a retirement system of such State, political subdivision, or instrumentality, except that the provisions of this subparagraph shall not be applicable to service performed—
I.R.C. § 3121(b)(7)(F)(i)
by an individual who is employed to relieve such individual from unemployment;
I.R.C. § 3121(b)(7)(F)(ii)
in a hospital, home, or other institution by a patient or inmate thereof;
I.R.C. § 3121(b)(7)(F)(iii)
by any individual as an employee serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency;
I.R.C. § 3121(b)(7)(F)(iv)
by an election official or election worker if the remuneration paid in a calendar year for such service is less than $1,000 with respect to service performed during any calendar year commencing on or after January 1, 1995, ending on or before December 31, 1999, and the adjusted amount determined under section 218(c)(8)(B) of the Social Security Act for any calendar year commencing on or after January 1, 2000, with respect to service performed during such calendar year; or
I.R.C. § 3121(b)(7)(F)(v)
by an employee in a position compensated solely on a fee basis which is treated pursuant to section 1402(c)(2)(E) as a trade or business for purposes of inclusion of such fees in net earnings from self-employment; for purposes of this subparagraph, except as provided in regulations prescribed by the Secretary, the term “retirement system” has the meaning given such term by section 218(b)(4) of the Social Security Act;2
2 The amendments to section 3121(b)(7) are effective for services performed after July 1, 1991.
I.R.C. § 3121(b)(8)
I.R.C. § 3121(b)(8)(A)
service performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order, except that this subparagraph shall not apply to service performed by a member of such an order in the exercise of such duties, if an election of coverage under subsection (r) is in effect with respect to such order, or with respect to the autonomous subdivision thereof to which such member belongs;
I.R.C. § 3121(b)(8)(B)
service performed in the employ of a church or qualified church-controlled organization if such church or organization has in effect an election under subsection (w), other than service in an unrelated trade or business (within the meaning of section 513(a));
I.R.C. § 3121(b)(9)
service performed by an individual as an employee or employee representative as defined in section 3231;
I.R.C. § 3121(b)(10)
service performed in the employ of—
I.R.C. § 3121(b)(10)(A)
a school, college, or university, or
I.R.C. § 3121(b)(10)(B)
an organization described in section 509(a)(3) if the organization is organized, and at all times thereafter is operated, exclusively for the benefit of, to perform the functions of, or to carry out the purposes of a school, college, or university and is operated, supervised, or controlled by or in connection with such school, college, or university, unless it is a school, college, or university of a State or a political subdivision thereof and the services performed in its employ by a student referred to in section 218(c)(5) of the Social Security Act are covered under the agreement between the Commissioner of Social Security and such State entered into pursuant to section 218 of such Act;
if such service is performed by a student who is enrolled and regularly attending classes at such school, college, or university;
I.R.C. § 3121(b)(11)
service performed in the employ of a foreign government (including service as a consular or other officer or employee or a nondiplomatic representative);
I.R.C. § 3121(b)(12)
service performed in the employ of an instrumentality wholly owned by a foreign government—
I.R.C. § 3121(b)(12)(A)
if the service is of a character similar to that performed in foreign countries by employees of the United States Government or of an instrumentality thereof; and
I.R.C. § 3121(b)(12)(B)
if the Secretary of State shall certify to the Secretary of the Treasury that the foreign government, with respect to whose instrumentality and employees thereof exemption is claimed, grants an equivalent exemption with respect to similar service performed in the foreign country by employees of the United States Government and of instrumentalities thereof;
I.R.C. § 3121(b)(13)
service performed as a student nurse in the employ of a hospital or a nurses' training school by an individual who is enrolled and is regularly attending classes in a nurses' training school chartered or approved pursuant to State law;
I.R.C. § 3121(b)(14)
I.R.C. § 3121(b)(14)(A)
service performed by an individual under the age of 18 in the delivery or distribution of newspapers or shopping news, not including delivery or distribution to any point for subsequent delivery or distribution;
I.R.C. § 3121(b)(14)(B)
service performed by an individual in, and at the time of, the sale of newspapers or magazines to ultimate consumers, under an arrangement under which the newspapers or magazines are to be sold by him at a fixed price, his compensation being based on the retention of the excess of such price over the amount at which the newspapers or magazines are charged to him, whether or not he is guaranteed a minimum amount of compensation for such service, or is entitled to be credited with the unsold newspapers or magazines turned back;
I.R.C. § 3121(b)(15)
service performed in the employ of an international organization; except service which constitutes “employment” under subsection (y);
I.R.C. § 3121(b)(16)
service performed by an individual under an arrangement with the owner or tenant of land pursuant to which—
I.R.C. § 3121(b)(16)(A)
such individual undertakes to produce agricultural or horticultural commodities (including livestock, bees, poultry, and fur-bearing animals and wildlife) on such land,
I.R.C. § 3121(b)(16)(B)
the agricultural or horticultural commodities produced by such individual, or the proceeds therefrom, are to be divided between such individual and such owner or tenant, and
I.R.C. § 3121(b)(16)(C)
the amount of such individual's share depends on the amount of the agricultural or horticultural commodities produced;
I.R.C. § 3121(b)(17)
[Repealed. Pub. L. 113-295, Div. A, Sec. 221(a)(99)(C)(i), Dec. 19, 2014]
I.R.C. § 3121(b)(18)
service performed in Guam by a resident of the Republic of the Philippines while in Guam on a temporary basis as a nonimmigrant alien admitted to Guam pursuant to section 101(a)(15)(H)(ii) of the Immigration and Nationality Act (8 U.S.C. 1101(a)(15)(H)(ii));
I.R.C. § 3121(b)(19)
Service which is performed by a nonresident alien individual for the period he is temporarily present in the United States as a nonimmigrant under subparagraph (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act, as amended, and which is performed to carry out the purpose specified in subparagraph (F), (J), (M), or (Q), as the case may be;
I.R.C. § 3121(b)(20)
service (other than service described in paragraph (3)(A)) performed by an individual on a boat engaged in catching fish or other forms of aquatic animal life under an arrangement with the owner or operator of such boat pursuant to which—
I.R.C. § 3121(b)(20)(A)
such individual does not receive any cash remuneration other than as provided in subparagraph (B) and other than cash remuneration—
I.R.C. § 3121(b)(20)(A)(i)
which does not exceed $100 per trip;
I.R.C. § 3121(b)(20)(A)(ii)
which is contingent on a minimum catch; and
I.R.C. § 3121(b)(20)(A)(iii)
which is paid solely for additional duties (such as mate, engineer, or cook) for which additional cash remuneration is traditional in the industry,
I.R.C. § 3121(b)(20)(B)
such individual receives a share of the boat's (or the boats' in the case of a fishing operation involving more than one boat) catch of fish or other forms of aquatic animal life or a share of the proceeds from the sale of such catch, and
I.R.C. § 3121(b)(20)(C)
the amount of such individual's share depends on the amount of the boat's (or the boats' in the case of a fishing operation involving more than one boat) catch of fish or other forms of aquatic animal life,
but only if the operating crew of such boat (or each boat from which the individual receives a share in the case of a fishing operation involving more than one boat) is normally made up of fewer than 10 individuals;
I.R.C. § 3121(b)(21)
domestic service in a private home of the employer which—
I.R.C. § 3121(b)(21)(A)
is performed in any year by an individual under the age of 18 during any portion of such year; and
I.R.C. § 3121(b)(21)(B)
is not the principal occupation of such employee; or
I.R.C. § 3121(b)(22)
service performed by members of Indian tribal councils as tribal council members in the employ of an Indian tribal government, except that this paragraph shall not apply in the case of service included under an agreement under section 218A of the Social Security Act.
For purposes of paragraph (20), the operating crew of a boat shall be treated as normally made up of fewer than 10 individuals if the average size of the operating crew on trips made during the preceding 4 calendar quarters consisted of fewer than 10 individuals.
I.R.C. § 3121(c) Included And Excluded Service
For purposes of this chapter, if the services performed during one-half or more of any pay period by an employee for the person employing him constitute employment, all the services of such employee for such period shall be deemed to be employment; but if the services performed during more than one-half of any such pay period by an employee for the person employing him do not constitute employment, then none of the services of such employee for such period shall be deemed to be employment. As used in this subsection, the term “pay period” means a period (of not more than 31 consecutive days) for which a payment of remuneration is ordinarily made to the employee by the person employing him. This subsection shall not be applicable with respect to services performed in a pay period by an employee for the person employing him, where any of such service is excepted by subsection (b)(9).
I.R.C. § 3121(d) Employee
For purposes of this chapter, the term “employee” means—
I.R.C. § 3121(d)(1)
any officer of a corporation; or
I.R.C. § 3121(d)(2)
any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee; or
I.R.C. § 3121(d)(3)
any individual (other than an individual who is an employee under paragraph (1) or (2)) who performs services for remuneration for any person—
I.R.C. § 3121(d)(3)(A)
as an agent-driver or commission-driver engaged in distributing meat products, vegetable products, fruit products, bakery products, beverages (other than milk), or laundry or dry-cleaning services, for his principal;
I.R.C. § 3121(d)(3)(B)
as a full-time life insurance salesman;
I.R.C. § 3121(d)(3)(C)
as a home worker performing work, according to specifications furnished by the person for whom the services are performed, on materials or goods furnished by such person which are required to be returned to such person or a person designated by him; or
I.R.C. § 3121(d)(3)(D)
as a traveling or city salesman, other than as an agent-driver or commission-driver, engaged upon a full-time basis in the solicitation on behalf of, and the transmission to, his principal (except for side-line sales activities on behalf of some other person) of orders from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments for merchandise for resale or supplies for use in their business operations;
if the contract of service contemplates that substantially all of such services are to be performed personally by such individual; except that an individual shall not be included in the term “employee” under the provisions of this paragraph if such individual has a substantial investment in facilities used in connection with the performance of such services (other than in facilities for transportation), or if the services are in the nature of a single transaction not part of a continuing relationship with the person for whom the services are performed; or
I.R.C. § 3121(d)(4)
any individual who performs services that are included under an agreement entered into pursuant to section 218 or 218A of the Social Security Act.
I.R.C. § 3121(e) State, United States, And Citizen
For purposes of this chapter—
I.R.C. § 3121(e)(1) State
The term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.
I.R.C. § 3121(e)(2) United States
The term “United States” when used in a geographical sense includes the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.
An individual who is a citizen of the Commonwealth of Puerto Rico (but not otherwise a citizen of the United States) shall be considered, for purposes of this section, as a citizen of the United States.
I.R.C. § 3121(f) American Vessel And Aircraft
For purposes of this chapter, the term “American vessel" means any vessel documented or numbered under the laws of the United States; and includes any vessel which is neither documented or numbered under the laws of the United States nor documented under the laws of any foreign country, if its crew is employed solely by one or more citizens or residents of the United States or corporations organized under the laws of the United States or of any State; and the term “American aircraft” means an aircraft registered under the laws of the United States.
I.R.C. § 3121(g) Agricultural Labor
For purposes of this chapter, the term “agricultural labor” includes all service performed—
I.R.C. § 3121(g)(1)
on a farm, in the employ of any person, in connection with cultivating the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and fur-bearing animals and wildlife;
I.R.C. § 3121(g)(2)
in the employ of the owner or tenant or other operator of a farm, in connection with the operation, management, conservation, improvement, or maintenance of such farm and its tools and equipment, or in salvaging timber or clearing land of brush and other debris left by a hurricane, if the major part of such service is performed on a farm;
I.R.C. § 3121(g)(3)
in connection with the production or harvesting of any commodity defined as an agricultural commodity in section 15(g) of the Agricultural Marketing Act, as amended (12 U.S.C. 1141j), or in connection with the ginning of cotton, or in connection with the operation or maintenance of ditches, canals, reservoirs, or waterways, not owned or operated for profit, used exclusively for supplying and storing water for farming purposes;
I.R.C. § 3121(g)(4)
I.R.C. § 3121(g)(4)(A)
in the employ of the operator of a farm in handling, planting, drying, packing, packaging, processing, freezing, grading, storing, or delivering to storage or to market or to a carrier for transportation to market, in its unmanufactured state, any agricultural or horticultural commodity; but only if such operator produced more than one-half of the commodity with respect to which such service is performed;
I.R.C. § 3121(g)(4)(B)
in the employ of a group of operators of farms (other than a cooperative organization) in the performance of service described in subparagraph (A), but only if such operators produced all of the commodity with respect to which such service is performed. For purposes of this subparagraph, any unincorporated group of operators shall be deemed a cooperative organization if the number of operators comprising such group is more than 20 at any time during the calendar year in which such service is performed;
I.R.C. § 3121(g)(4)(C)
the provisions of subparagraphs (A) and (B) shall not be deemed to be applicable with respect to service performed in connection with commercial canning or commercial freezing or in connection with any agricultural or horticultural commodity after its delivery to a terminal market for distribution for consumption; or
I.R.C. § 3121(g)(5)
on a farm operated for profit if such service is not in the course of the employer's trade or business.
As used in this subsection, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards.
I.R.C. § 3121(h) American Employer
For purposes of this chapter, the term “American employer" means an employer which is—
I.R.C. § 3121(h)(1)
the United States or any instrumentality thereof,
I.R.C. § 3121(h)(2)
an individual who is a resident of the United States,
I.R.C. § 3121(h)(3)
a partnership, if two-thirds or more of the partners are residents of the United States,
I.R.C. § 3121(h)(4)
a trust, if all of the trustees are residents of the United States, or
I.R.C. § 3121(h)(5)
a corporation organized under the laws of the United States or of any State.
I.R.C. § 3121(i) Computation Of Wages In Certain Cases
I.R.C. § 3121(i)(1) Domestic Service
For purposes of this chapter, in the case of domestic service described in subsection (a)(7)(B), any payment of cash remuneration for such service which is more or less than a whole-dollar amount shall, under such conditions and to such extent as may be prescribed by regulations made under this chapter, be computed to the nearest dollar. For the purpose of the computation to the nearest dollar, the payment of a fractional part of a dollar shall be disregarded unless it amounts to one-half dollar or more, in which case it shall be increased to $1. The amount of any payment of cash remuneration so computed to the nearest dollar shall, in lieu of the amount actually paid, be deemed to constitute the amount of cash remuneration for purposes of subsection (a)(7)(B).
I.R.C. § 3121(i)(2) Service In The Uniformed Services
For purposes of this chapter, in the case of an individual performing service, as a member of a uniformed service, to which the provisions of subsection (m)(1) are applicable, the term “wages" shall, subject to the provisions of subsection (a)(1) of this section, include as such individual's remuneration for such service only (A) his basic pay as described in chapter 3 and section 1009 of title 37, United States Code, in the case of an individual performing service to which subparagraph (A) of such subsection (m)(1) applies, or (B) his compensation for such service as determined under section 206(a) of title 37, United States Code, in the case of an individual performing service to which subparagraph (B) of such subsection (m)(1) applies.
I.R.C. § 3121(i)(3) Peace Corps Volunteer Service
For purposes of this chapter, in the case of an individual performing service, as a volunteer or volunteer leader within the meaning of the Peace Corps Act, to which the provisions of section 3121(p) are applicable, the term “wages” shall, subject to the provisions of subsection (a)(1) of this section, include as such individual's remuneration for such service only amounts paid pursuant to section 5(c) or 6(1) of the Peace Corps Act.
I.R.C. § 3121(i)(4) Service Performed By Certain Members Of Religious Orders
For purposes of this chapter, in any case where an individual is a member of a religious order (as defined in subsection (r)(2)) performing service in the exercise of duties required by such order, and an election of coverage under subsection (r) is in effect with respect to such order or with respect to the autonomous subdivision thereof to which such member belongs, the term “wages" shall, subject to the provisions of subsection (a)(1), include as such individual's remuneration for such service the fair market value of any board, lodging, clothing, and other perquisites furnished to such member by such order or subdivision thereof or by any other person or organization pursuant to an agreement with such order or subdivision, except that the amount included as such individual's remuneration under this paragraph shall not be less than $100 a month.
I.R.C. § 3121(i)(5) Service Performed By Certain Retired Justices And Judges
For purposes of this chapter, in the case of an individual performing service under the provisions of section 294 of title 28, United States Code (relating to assignment of retired justices and judges to active duty), the term “wages” shall not include any payment under section 371(b) of such title 28 which is received during the period of such service.
I.R.C. § 3121(j) Covered Transportation Service
For purposes of this chapter—
I.R.C. § 3121(j)(1) Existing Transportation Systems—General Rule
Except as provided in paragraph (2), all service performed in the employ of a State or political subdivision in connection with its operation of a public transportation system shall constitute covered transportation service if any part of the transportation system was acquired from private ownership after 1936 and prior to 1951.
I.R.C. § 3121(j)(2) Existing Transportation Systems—Cases In Which No Transportation Employees, Or Only Certain Employees, Are Covered
Service performed in the employ of a State or political subdivision in connection with the operation of its public transportation system shall not constitute covered transportation service if—
I.R.C. § 3121(j)(2)(A)
any part of the transportation system was acquired from private ownership after 1936 and prior to 1951, and substantially all service in connection with the operation of the transportation system was, on December 31, 1950, covered under a general retirement system providing benefits which, by reason of a provision of the State constitution dealing specifically with retirement systems of the State or political subdivisions thereof, cannot be diminished or impaired; or
I.R.C. § 3121(j)(2)(B)
no part of the transportation system operated by the State or political subdivision on December 31, 1950, was acquired from private ownership after 1936 and prior to 1951;
except that if such State or political subdivision makes an acquisition after 1950 from private ownership of any part of its transportation system, then, in the case of any employee who—
I.R.C. § 3121(j)(2)(C)
became an employee of such State or political subdivision in connection with and at the time of its acquisition after 1950 of such part, and
I.R.C. § 3121(j)(2)(D)
prior to such acquisition rendered service in employment (including as employment service covered by an agreement under section 218 of the Social Security Act) in connection with the operation of such part of the transportation system acquired by the State or political subdivision, the service of such employee in connection with the operation of the transportation system shall constitute covered transportation service, commencing with the first day of the third calendar quarter following the calendar quarter in which the acquisition of such part took place, unless on such first day such service of such employee is covered by a general retirement system which does not, with respect to such employee, contain special provisions applicable only to employees described in subparagraph (C).
I.R.C. § 3121(j)(3) Transportation Systems Acquired After 1950
All service performed in the employ of a State or political subdivision thereof in connection with its operation of a public transportation system shall constitute covered transportation service if the transportation system was not operated by the State or political subdivision prior to 1951 and, at the time of its first acquisition (after 1950) from private ownership of any part of its transportation system, the State or political subdivision did not have a general retirement system covering substantially all service performed in connection with the operation of the transportation system.
I.R.C. § 3121(j)(4) Definitions
For purposes of this subsection—
I.R.C. § 3121(j)(4)(A)
The term “general retirement system" means any pension, annuity, retirement, or similar fund or system established by a State or by a political subdivision thereof for employees of the State, political subdivision, or both; but such term shall not include such a fund or system which covers only service performed in positions connected with the operation of its public transportation system.
I.R.C. § 3121(j)(4)(B)
A transportation system or a part thereof shall be considered to have been acquired by a State or political subdivision from private ownership if prior to the acquisition service performed by employees in connection with the operation of the system or part thereof acquired constituted employment under this chapter or subchapter A of chapter 9 of the Internal Revenue Code of 1939 or was covered by an agreement made pursuant to section 218 of the Social Security Act and some of such employees became employees of the State or political subdivision in connection with and at the time of such acquisition.
I.R.C. § 3121(j)(4)(C)
The term “political subdivision" includes an instrumentality of—
I.R.C. § 3121(j)(4)(C)(ii)
one or more political subdivisions of a State, or
I.R.C. § 3121(j)(4)(C)(iii)
a State and one or more of its political subdivisions.
I.R.C. § 3121(k)
[Repealed. Pub. L. 98-21, title I, 102(b)(2), Apr. 20, 1983, 97 Stat. 71]
I.R.C. § 3121(l) Agreements Entered Into By American Employers With Respect To Foreign Affiliates
I.R.C. § 3121(l)(1) Agreement With Respect To Certain Employees Of Foreign Affiliate
The Secretary shall, at the American employer's request, enter into an agreement (in such manner and form as may be prescribed by the Secretary) with any American employer (as defined in subsection (h)) who desires to have the insurance system established by title II of the Social Security Act extended to service performed outside the United States in the employ of any 1 or more of such employer's foreign affiliates (as defined in paragraph (6)) by all employees who are citizens or residents of the United States, except that the agreement shall not apply to any service performed by, or remuneration paid to, an employee if such service or remuneration would be excluded from the term “employment” or “wages”, as defined in this section, had the service been performed in the United States. Such agreement may be amended at any time so as to be made applicable, in the same manner and under the same conditions, with respect to any other foreign affiliate of such American employer. Such agreement shall be applicable with respect to citizens or residents of the United States who, on or after the effective date of the agreement, are employees of and perform services outside the United States for any foreign affiliate specified in the agreement. Such agreement shall provide—
I.R.C. § 3121(l)(1)(A)
that the American employer shall pay to the Secretary, at such time or times as the Secretary may by regulations prescribe, amounts equivalent to the sum of the taxes which would be imposed by sections 3101 and 3111 (including amounts equivalent to the interest, additions to the taxes, additional amounts, and penalties which would be applicable) with respect to the remuneration which would be wages if the services covered by the agreement constituted employment as defined in this section; and
I.R.C. § 3121(l)(1)(B)
that the American employer will comply with such regulations relating to payments and reports as the Secretary may prescribe to carry out the purposes of this subsection.
I.R.C. § 3121(l)(2) Effective Period Of Agreement
An agreement entered into pursuant to paragraph (1) shall be in effect for the period beginning with the first day of the calendar quarter in which such agreement is entered into or the first day of the succeeding calendar quarter, as may be specified in the agreement; except that in case such agreement is amended to include the services performed for any other affiliate and such amendment is executed after the first month following the first calendar quarter for which the agreement is in effect, the agreement shall be in effect with respect to service performed for such other affiliate only after the calendar quarter in which such amendment is executed. Notwithstanding any other provision of this subsection, the period for which any such agreement is effective with respect to any foreign entity shall terminate at the end of any calendar quarter in which the foreign entity, at any time in such quarter, ceases to be a foreign affiliate as defined in paragraph (6).
I.R.C. § 3121(l)(3) No Termination Of Agreement
No agreement under this subsection may be terminated, either in its entirety or with respect to any foreign affiliate, on or after June 15, 1989.
I.R.C. § 3121(l)(4) Deposits In Trust Funds
For purposes of section 201 of the Social Security Act, relating to appropriations to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund, such remuneration—
I.R.C. § 3121(l)(4)(A)
paid for services covered by an agreement entered into pursuant to paragraph (1) as would be wages if the services constituted employment, and
I.R.C. § 3121(l)(4)(B)
as is reported to the Secretary pursuant to the provisions of such agreement or of the regulations issued under this subsection,
shall be considered wages subject to the taxes imposed by this chapter.
I.R.C. § 3121(l)(5) Overpayments And Underpayments
I.R.C. § 3121(l)(5)(A)
If more or less than the correct amount due under an agreement entered into pursuant to this subsection is paid with respect to any payment of remuneration, proper adjustments with respect to the amounts due under such agreement shall be made, without interest, in such manner and at such times as may be required by regulations prescribed by the Secretary.
I.R.C. § 3121(l)(5)(B)
If an overpayment cannot be adjusted under subparagraph (A), the amount thereof shall be paid by the Secretary, through the Fiscal Service of the Treasury Department, but only if a claim for such overpayment is filed with the Secretary within two years from the time such overpayment was made.
I.R.C. § 3121(l)(6) Foreign Affiliate Defined
For purposes of this subsection and section 210(a) of the Social Security Act—
I.R.C. § 3121(l)(6)(A) In General
A foreign affiliate of an American employer is any foreign entity in which such American employer has not less than a 10-percent interest.
I.R.C. § 3121(l)(6)(B) Determination Of 10-Percent Interest
For purposes of subparagraph (A), an American employer has a 10-percent interest in any entity if such employer has such an interest directly (or through one or more entities)—
I.R.C. § 3121(l)(6)(B)(i)
in the case of a corporation, in the voting stock thereof, and
I.R.C. § 3121(l)(6)(B)(ii)
in the case of any other entity, in the profits thereof.
I.R.C. § 3121(l)(7) American Employer As Separate Entity
Each American employer which enters into an agreement pursuant to paragraph (1) of this subsection shall, for purposes of this subsection and section 6413(c)(2)(C), relating to special refunds in the case of employees of certain foreign entities, be considered an employer in its capacity as a party to such agreement separate and distinct from its identity as a person employing individuals on its own account.
I.R.C. § 3121(l)(8) Regulations
Regulations of the Secretary to carry out the purposes of this subsection shall be designed to make the requirements imposed on American employers with respect to services covered by an agreement entered into pursuant to this subsection the same, so far as practicable, as those imposed upon employers pursuant to this title with respect to the taxes imposed by this chapter.
I.R.C. § 3121(m) Service In The Uniformed Services
For purposes of this chapter—
I.R.C. § 3121(m)(1) Inclusion Of Service
The term “employment” shall, notwithstanding the provisions of subsection (b) of this section, include—
I.R.C. § 3121(m)(1)(A)
service performed by an individual as a member of a uniformed service on active duty, but such term shall not include any such service which is performed while on leave without pay, and
I.R.C. § 3121(m)(1)(B)
service performed by an individual as a member of a uniformed service on inactive duty training.
I.R.C. § 3121(m)(2) Active Duty
The term “active duty” means “active duty” as described in paragraph (21) of section 101 of title 38, United States Code, except that it shall also include “active duty for training” as described in paragraph (22) of such section.
I.R.C. § 3121(m)(3) Inactive Duty Training
The term “inactive duty training” means “inactive duty training” as described in paragraph (23) of such section 101.
I.R.C. § 3121(n) Member Of A Uniformed Service
For purposes of this chapter, the term “member of a uniformed service” means any person appointed, enlisted, or inducted in a component of the Army, Navy, Air Force, Marine Corps, or Coast Guard (including a reserve component as defined in section 101(27) of title 38, United States Code), or in one of those services without specification of component, or as a commissioned officer of the Coast and Geodetic Survey, the National Oceanic and Atmospheric Administration Corps, or the Regular or Reserve Corps of the Public Health Service, and any person serving in the Army or Air Force under call or conscription. The term includes—
I.R.C. § 3121(n)(1)
a retired member of any of those services;
I.R.C. § 3121(n)(2)
a member of the Fleet Reserve or Fleet Marine Corps Reserve;
I.R.C. § 3121(n)(3)
a cadet at the United States Military Academy, a midshipman at the United States Naval Academy, and a cadet at the United States Coast Guard Academy or United States Air Force Academy;
I.R.C. § 3121(n)(4)
a member of the Reserve Officers' Training Corps, the Naval Reserve Officers' Training Corps, or the Air Force Reserve Officers' Training Corps, when ordered to annual training duty for fourteen days or more, and while performing authorized travel to and from that duty; and
I.R.C. § 3121(n)(5)
any person while en route to or from, or at, a place for final acceptance or for entry upon active duty in the military, naval, or air service—
I.R.C. § 3121(n)(5)(A)
who has been provisionally accepted for such duty; or
I.R.C. § 3121(n)(5)(B)
who, under the Military Selective Service Act, has been selected for active military, naval, or air service;
and has been ordered or directed to proceed to such place.
The term does not include a temporary member of the Coast Guard Reserve.
I.R.C. § 3121(o) Crew Leader
For purposes of this chapter, the term “crew leader" means an individual who furnishes individuals to perform agricultural labor for another person, if such individual pays (either on his own behalf or on behalf of such person) the individuals so furnished by him for the agricultural labor performed by them and if such individual has not entered into a written agreement with such person whereby such individual has been designated as an employee of such person; and such individuals furnished by the crew leader to perform agricultural labor for another person shall be deemed to be the employees of such crew leader. For purposes of this chapter and chapter 2, a crew leader shall, with respect to service performed in furnishing individuals to perform agricultural labor for another person and service performed as a member of the crew, be deemed not to be an employee of such other person.
I.R.C. § 3121(p) Peace Corps Volunteer Service
For purposes of this chapter, the term “employment" shall, notwithstanding the provisions of subsection (b) of this section, include service performed by an individual as a volunteer or volunteer leader within the meaning of the Peace Corps Act.
I.R.C. § 3121(q) Tips Included For Both Employee And Employer Taxes
For purposes of this chapter, tips received by an employee in the course of his employment shall be considered remuneration for such employment (and deemed to have been paid by the employer for purposes of subsections (a) and (b) of section 3111). Such remuneration shall be deemed to be paid at the time a written statement including such tips is furnished to the employer pursuant to section 6053(a) or (if no statement including such tips is so furnished) at the time received; except that, in determining the employer's liability in connection with the taxes imposed by section 3111 with respect to such tips in any case where no statement including such tips was so furnished (or to the extent that the statement so furnished was inaccurate or incomplete), such remuneration shall be deemed for purposes of subtitle F to be paid on the date on which notice and demand for such taxes is made to the employer by the Secretary.
I.R.C. § 3121(r) Election Of Coverage By Religious Orders
I.R.C. § 3121(r)(1) Certificate Of Election By Order
A religious order whose members are required to take a vow of poverty, or any autonomous subdivision of such order, may file a certificate (in such form and manner, and with such official, as may be prescribed by regulations under this chapter) electing to have the insurance system established by title II of the Social Security Act extended to services performed by its members in the exercise of duties required by such order or such subdivision thereof. Such certificate of election shall provide that—
I.R.C. § 3121(r)(1)(A)
such election of coverage by such order or subdivision shall be irrevocable;
I.R.C. § 3121(r)(1)(B)
such election shall apply to all current and future members of such order, or in the case of a subdivision thereof to all current and future members of such order who belong to such subdivision;
I.R.C. § 3121(r)(1)(C)
all services performed by a member of such an order or subdivision in the exercise of duties required by such order or subdivision shall be deemed to have been performed by such member as an employee of such order or subdivision; and
I.R.C. § 3121(r)(1)(D)
the wages of each member, upon which such order or subdivision shall pay the taxes imposed by sections 3101 and 3111, will be determined as provided in subsection (i)(4).
I.R.C. § 3121(r)(2) Definition Of Member
For purposes of this subsection, a member of a religious order means any individual who is subject to a vow of poverty as a member of such order and who performs tasks usually required (and to the extent usually required) of an active member of such order and who is not considered retired because of old age or total disability.
I.R.C. § 3121(r)(3) Effective Date For Election
I.R.C. § 3121(r)(3)(A)
A certificate of election of coverage shall be in effect, for purposes of subsection (b)(8) and for purposes of section 210(a)(8) of the Social Security Act, for the period beginning with whichever of the following may be designated by the order or subdivision thereof:
I.R.C. § 3121(r)(3)(A)(i)
the first day of the calendar quarter in which the certificate is filed,
I.R.C. § 3121(r)(3)(A)(ii)
the first day of the calendar quarter succeeding such quarter, or
I.R.C. § 3121(r)(3)(A)(iii)
the first day of any calendar quarter preceding the calendar quarter in which the certificate is filed, except that such date may not be earlier than the first day of the twentieth calendar quarter preceding the quarter in which such certificate is filed.
Whenever a date is designated under clause (iii), the election shall apply to services performed before the quarter in which the certificate is filed only if the member performing such services was a member at the time such services were performed and is living on the first day of the quarter in which such certificate is filed.
I.R.C. § 3121(r)(3)(B)
If a certificate of election filed pursuant to this subsection is effective for one or more calendar quarters prior to the quarter in which such certificate is filed, then—
I.R.C. § 3121(r)(3)(B)(i)
for purposes of computing interest and for purposes of section 6651 (relating to addition to tax for failure to file tax return), the due date for the return and payment of the tax for such prior calendar quarters resulting from the filing of such certificate shall be the last day of the calendar month following the calendar quarter in which the certificate is filed; and
I.R.C. § 3121(r)(3)(B)(ii)
the statutory period for the assessment of such tax shall not expire before the expiration of 3 years from such due date.
[(4) Repealed. Pub. L. 98-21, title I, 102(b)(3)(B), Apr. 20, 1983, 97 Stat. 71]
I.R.C. § 3121(s) Concurrent Employment By Two Or More Employers
For purposes of sections 3102, 3111, and 3121(a)(1), if two or more related corporations concurrently employ the same individual and compensate such individual through a common paymaster which is one of such corporations, each such corporation shall be considered to have paid as remuneration to such individual only the amounts actually disbursed by it to such individual and shall not be considered to have paid as remuneration to such individual amounts actually disbursed to such individual by another of such corporations.
I.R.C. § 3121(t)
[Repealed. Pub. L. 100-203, title IX, 9006(b)(2), Dec. 22, 1987, 101 Stat. 1330-289]
I.R.C. § 3121(u) Application Of Hospital Insurance Tax To Federal, State, And Local Employment
I.R.C. § 3121(u)(1) Federal Employment
For purposes of the taxes imposed by sections 3101(b) and 3111(b), subsection (b) shall be applied without regard to paragraph (5) thereof.
I.R.C. § 3121(u)(2) State And Local Employment
For purposes of the taxes imposed by sections 3101(b) and 3111(b)
I.R.C. § 3121(u)(2)(A) In General
Except as provided in subparagraphs (B) and (C), subsection (b) shall be applied without regard to paragraph (7) thereof.
I.R.C. § 3121(u)(2)(B) Exception For Certain Services
Service shall not be treated as employment by reason of subparagraph (A) if—
I.R.C. § 3121(u)(2)(B)(i)
the service is included under an agreement under section 218 of the Social Security Act, or
I.R.C. § 3121(u)(2)(B)(ii)
the service is performed—
I.R.C. § 3121(u)(2)(B)(ii)(I)
by an individual who is employed by a State or political subdivision thereof to relieve him from unemployment,
I.R.C. § 3121(u)(2)(B)(ii)(II)
in a hospital, home, or other institution by a patient or inmate thereof as an employee of a State or political subdivision thereof or of the District of Columbia,
I.R.C. § 3121(u)(2)(B)(ii)(III)
by an individual, as an employee of a State or political subdivision thereof or of the District of Columbia, serving on a temporary basis in case of fire, storm, snow, earthquake, flood or other similar emergency,
I.R.C. § 3121(u)(2)(B)(ii)(IV)
by any individual as an employee included under section 5351(2) of title 5, United States Code (relating to certain interns, student nurses, and other student employees of hospitals of the District of Columbia Government), other than as a medical or dental intern or a medical or dental resident in training,
I.R.C. § 3121(u)(2)(B)(ii)(V)
by an election official or election worker if the remuneration paid in a calendar year for such service is less than $1,000 with respect to service performed during any calendar year commencing on or after January 1, 1995, ending on or before December 31, 1999, and the adjusted amount determined under section 218(c)(8)(B) of the Social Security Act for any calendar year commencing on or after January 1, 2000, with respect to service performed during such calendar year, or
I.R.C. § 3121(u)(2)(B)(ii)(VI)
by an individual in a position described in section 1402(c)(2)(E).
As used in this subparagraph, the terms “State” and “political subdivision” have the meanings given those terms in section 218(b) of the Social Security Act.
I.R.C. § 3121(u)(2)(C) Exception For Current Employment Which Continues
Service performed for an employer shall not be treated as employment by reason of subparagraph (A) if—
I.R.C. § 3121(u)(2)(C)(i)
such service would be excluded from the term “employment” for purposes of this chapter if subparagraph (A) did not apply;
I.R.C. § 3121(u)(2)(C)(ii)
such service is performed by an individual—
I.R.C. § 3121(u)(2)(C)(ii)(I)
who was performing substantial and regular service for remuneration for that employer before April 1, 1986,
I.R.C. § 3121(u)(2)(C)(ii)(II)
who is a bona fide employee of that employer on March 31, 1986, and
I.R.C. § 3121(u)(2)(C)(ii)(III)
whose employment relationship with that employer was not entered into for purposes of meeting the requirements of this subparagraph; and
I.R.C. § 3121(u)(2)(C)(iii)
the employment relationship with that employer has not been terminated after March 31, 1986.
I.R.C. § 3121(u)(2)(D) Treatment Of Agencies And Instrumentalities
For purposes of subparagraph (C), under regulations—
I.R.C. § 3121(u)(2)(D)(i)
All agencies and instrumentalities of a State (as defined in section 218(b) of the Social Security Act) or of the District of Columbia shall be treated as a single employer.
I.R.C. § 3121(u)(2)(D)(ii)
All agencies and instrumentalities of a political subdivision of a State (as so defined) shall be treated as a single employer and shall not be treated as described in clause (i).
I.R.C. § 3121(u)(3) Medicare Qualified Government Employment
For purposes of this chapter, the term “medicare qualified government employment” means service which—
I.R.C. § 3121(u)(3)(A)
is employment (as defined in subsection (b)) with the application of paragraphs (1) and (2), but
I.R.C. § 3121(u)(3)(B)
would not be employment (as so defined) without the application of such paragraphs.
I.R.C. § 3121(v) Treatment Of Certain Deferred Compensation And Salary Reduction Arrangements
I.R.C. § 3121(v)(1) Certain Employer Contributions Treated As Wages
Nothing in any paragraph of subsection (a) (other than paragraph (1)) shall exclude from the term “wages"—
I.R.C. § 3121(v)(1)(A)
any employer contribution under a qualified cash or deferred arrangement (as defined in section 401(k)) to the extent not included in gross income by reason of section 402(e)(3) or consisting of designated Roth contributions (as defined in section 402A(c)), or 3
3 Section 521(b)(34) of the Unemployment Compensation Amendments of 1992 amends subparagraph (A) of section 3121(v)(1) by striking “section 402(a)(8)” and inserting “section 402(e)(3)“.
I.R.C. § 3121(v)(1)(B)
any amount treated as an employer contribution under section 414(h)(2) where the pickup referred to in such section is pursuant to a salary reduction agreement (whether evidenced by a written instrument or otherwise).
I.R.C. § 3121(v)(2) Treatment Of Certain Nonqualified Deferred Compensation Plans
I.R.C. § 3121(v)(2)(A) In General
Any amount deferred under a nonqualified deferred compensation plan shall be taken into account for purposes of this chapter as of the later of—
I.R.C. § 3121(v)(2)(A)(i)
when the services are performed, or
I.R.C. § 3121(v)(2)(A)(ii)
when there is no substantial risk of forfeiture of the rights to such amount.
The preceding sentence shall not apply to any excess parachute payment (as defined in section 280G(b)) or to any specified stock compensation (as defined in section 4985) on which tax is imposed by section 4985.
I.R.C. § 3121(v)(2)(B) Taxed Only Once
Any amount taken into account as wages by reason of subparagraph (A) (and the income attributable thereto) shall not thereafter be treated as wages for purposes of this chapter.
I.R.C. § 3121(v)(2)(C) Nonqualified Deferred Compensation Plan
For purposes of this paragraph, the term “nonqualified deferred compensation plan” means any plan or other arrangement for deferral of compensation other than a plan described in subsection (a)(5).
I.R.C. § 3121(v)(3) Exempt Governmental Deferred Compensation Plan
For purposes of subsection (a)(5), the term “exempt governmental deferred compensation plan” means any plan providing for deferral of compensation established and maintained for its employees by the United States, by a State or political subdivision thereof, or by an agency or instrumentality of any of the foregoing. Such term shall not include—
I.R.C. § 3121(v)(3)(A)
any plan to which section 83, 402(b), 403(c), 457(a), or 457(f)(1) applies,
I.R.C. § 3121(v)(3)(B)
any annuity contract described in section 403(b), and
I.R.C. § 3121(v)(3)(C)
the Thrift Savings Fund (within the meaning of subchapter III of chapter 84 of title 5, United States Code).
I.R.C. § 3121(w) Exemption Of Churches And Qualified Church-Controlled Organizations
I.R.C. § 3121(w)(1) General Rule
Any church or qualified church-controlled organization (as defined in paragraph (3)) may make an election within the time period described in paragraph (2), in accordance with such procedures as the Secretary determines to be appropriate, that services performed in the employ of such church or organization shall be excluded from employment for purposes of title II of the Social Security Act and this chapter. An election may be made under this subsection only if the church or qualified church-controlled organization states that such church or organization is opposed for religious reasons to the payment of the tax imposed under section 3111.
I.R.C. § 3121(w)(2) Timing And Duration Of Election
An election under this subsection must be made prior to the first date, more than 90 days after July 18, 1984, on which a quarterly employment tax return for the tax imposed under section 3111 is due, or would be due but for the election, from such church or organization. An election under this subsection shall apply to current and future employees, and shall apply to service performed after December 31, 1983. The election may be revoked by the church or organization under regulations prescribed by the Secretary. The election shall be revoked by the Secretary if such church or organization fails to furnish the information required under section 6051 to the Secretary for a period of 2 years or more with respect to remuneration paid for such services by such church or organization, and, upon request by the Secretary, fails to furnish all such previously unfurnished information for the period covered by the election. Any revocation under the preceding sentence shall apply retroactively to the beginning of the 2-year period for which the information was not furnished.
I.R.C. § 3121(w)(3) Definitions
I.R.C. § 3121(w)(3)(A)
For purposes of this subsection, the term “church” means a church, a convention or association of churches, or an elementary or secondary school which is controlled, operated, or principally supported by a church or by a convention or association of churches.
I.R.C. § 3121(w)(3)(B)
For purposes of this subsection, the term “qualified church-controlled organization” means any church-controlled tax-exempt organization described in section 501(c)(3), other than an organization which—
I.R.C. § 3121(w)(3)(B)(i)
offers goods, services, or facilities for sale, other than on an incidental basis, to the general public, other than goods, services, or facilities which are sold at a nominal charge which is substantially less than the cost of providing such goods, services, or facilities; and
I.R.C. § 3121(w)(3)(B)(ii)
normally receives more than 25 percent of its support from either (I) governmental sources, or (II) receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities which are not unrelated trades or businesses, or both.
I.R.C. § 3121(x) Applicable Dollar Threshold
For purposes of subsection (a)(7)(B), the term “applicable dollar threshold” means $1,000. In the case of calendar years after 1995, the Commissioner of Social Security shall adjust such $1,000 amount at the same time and in the same manner as under section 215(a)(1)(B)(ii) of the Social Security Act with respect to the amounts referred to in section 215(a)(1)(B)(i) of such Act, except that, for purposes of this paragraph, 1993 shall be substituted for the calendar year referred to in section 215(a)(1)(B)(ii)(II) of such Act. If any amount as adjusted under the preceding sentence is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100.
I.R.C. § 3121(y) Service In The Employ Of International Organizations By Certain Transferred Federal Employees
I.R.C. § 3121(y)(1) In General
For purposes of this chapter, service performed in the employ of an international organization by an individual pursuant to a transfer of such individual to such international organization pursuant to section 3582 of title 5, United States Code, shall constitute “employment” if—
I.R.C. § 3121(y)(1)(A)
immediately before such transfer, such individual performed service with a Federal agency which constituted “employment” under subsection (b) for purposes of the taxes imposed by sections 3101(a) and 3111(a), and
I.R.C. § 3121(y)(1)(B)
such individual would be entitled, upon separation from such international organization and proper application, to reemployment with such Federal agency under such section 3582.
I.R.C. § 3121(y)(2) Definitions
For purposes of this subsection—
I.R.C. § 3121(y)(2)(A) Federal Agency
The term “Federal agency” means an agency, as defined in section 3581(1) of title 5, United States Code.
I.R.C. § 3121(y)(2)(B) International Organization
The term “international organization” has the meaning provided such term by section 3581(3) of title 5, United States Code.
I.R.C. § 3121(z) Treatment Of Certain Foreign Persons As American Employers
I.R.C. § 3121(z)(1) In General
If any employee of a foreign person is performing services in connection with a contract between the United States Government (or any instrumentality thereof) and any member of any domestically controlled group of entities which includes such foreign person, such foreign person shall be treated for purposes of this chapter as an American employer with respect to such services performed by such employee.
I.R.C. § 3121(z)(2) Domestically Controlled Group Of Entities
For purposes of this subsection—
I.R.C. § 3121(z)(2)(A) In General
The term “domestically controlled group of entities” means a controlled group of entities the common parent of which is a domestic corporation.
I.R.C. § 3121(z)(2)(B) Controlled Group of Entities
The term “controlled group of entities” means a controlled group of corporations as defined in section 1563(a)(1), except that—
I.R.C. § 3121(z)(2)(B)(i)
“more than 50 percent” shall be substituted for “at least 80 percent” each place it appears therein, and
I.R.C. § 3121(z)(2)(B)(ii)
the determination shall be made without regard to subsections (a)(4) and (b)(2) of section 1563.
A partnership or any other entity (other than a corporation) shall be treated as a member of a controlled group of entities if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this sentence).
I.R.C. § 3121(z)(3) Liability Of Common Parent
In the case of a foreign person who is a member of any domestically controlled group of entities, the common parent of such group shall be jointly and severally liable for any tax under this chapter for which such foreign person is liable by reason of this subsection, and for any penalty imposed on such person by this title with respect to any failure to pay such tax or to file any return or statement with respect to such tax or wages subject to such tax. No deduction shall be allowed under this title for any liability imposed by the preceding sentence.
I.R.C. § 3121(z)(4) Provisions Preventing Double Taxation
I.R.C. § 3121(z)(4)(A) Agreements
Paragraph (1) shall not apply to any services which are covered by an agreement under subsection (l).
I.R.C. § 3121(z)(4)(B) Equivalent Foreign Taxation
Paragraph (1) shall not apply to any services if the employer establishes to the satisfaction of the Secretary that the remuneration paid by such employer for such services is subject to a tax imposed by a foreign country which is substantially equivalent to the taxes imposed by this chapter.
I.R.C. § 3121(z)(5) Cross Reference
For relief from taxes in cases covered by certain international agreements, see sections 3101(c) and 3111(c).
(Aug. 16, 1954, ch. 736, 68A Stat. 415; Sept. 1, 1954, ch. 1206, title II, Sec. 205A, 68 Stat. 1093; Aug. 1, 1956, ch. 836, title II, Sec. 201(h)(3), 70 Stat. 841; July 30, 1965, Pub. L. 89-97, title III, Sec. 313(c)(1), (2), 79 Stat. 382, 383; Oct. 4, 1976, Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), 90 Stat. 1834; Dec. 20, 1977, Pub. L. 95-216, title III, Sec. 355(a), (b), 91 Stat. 1555; Nov. 5, 1990, Pub. L. 101-508, title V, Sec. 5124(a), 104 Stat. 1388-284; Oct. 29, 1992, Pub. L. 102-572, title IX, Sec. 902(b)(1); Dec. 3, 1993, Pub. L. 103-178, Sec. 204(c); Aug. 15, 1994, Pub. L. 103-296, title I and III, Sec. 108(h)(2), 303(a)(2), 303(b)(2), 319(a)(1), 319(a)(5), 320(a)(1)(C); Oct. 22, 1994, Pub. L. 103-387, Sec. 2(a)(1)(A), (B) and (C); Aug. 20, 1996, Pub. L. 104-188, Sec. 1116, 1421, and 1458, 110 Stat. 1755; Pub. L. 105-34, title IX, Sec. 921(a), Aug. 5, 1997, 111 Stat 788; Oct. 10, 1997, Pub. L. 105-61, Sec. 642(d)(2), 111 Stat. 1272; Pub. L. 105-206, title VI, Sec. 6023, July 22, 1998, 112 Stat 685; Pub. L. 106-554, Sec. 319, Dec. 21, 2000, 114 Stat. 2763; Pub. L. 108-121, Sec. 106(b), Nov. 11, 2003, 117 Stat. 1335; Pub. L. 108-203, Sec. 423, Mar. 2, 2004, 118 Stat. 493; Pub. L. 108-357, title, II, III, VIII, Sec. 251, 320, 802, Oct. 22, 2004, 118 Stat. 1418; Pub. L. 108-375, Sec. 585(b)(2), Oct. 28, 2004, 118 Stat. 1811; Pub. L. 109-280, title VIII, Sec. 854(c)(8), Aug. 17, 2006, 120 Stat. 780; Pub. L. 110-172, Sec. 8(a)(2), Dec. 29, 2007, 121 Stat. 2473; Pub. L. 110-245, Sec. 115(a), 302(a), June 17, 2008, 122 Stat. 1624; Pub. L. 110-458, title I, Sec. 108(k)(1), Dec. 23, 2008, 122 Stat. 5092; Pub. L. 113-295, Div. A, title II, Sec. 221(a), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(209), (210), (325)(A), Mar. 23, 2018, 132 Stat. 348; Pub. L. 115-243, Sec. 2(b)(2), Sept. 20, 2018.)
BACKGROUND NOTES
Amendments to Subchapter
1988--Pub. L. 100-647, title VIII, 8007(a)(2), Nov. 10, 1988, 102 Stat. 3782, added item 3127 and redesignated former item 3127 as 3128.
1986--Pub. L. 99-509, title IX, 9002(a)(2), Oct. 21, 1986, 100 Stat. 1971, added item 3126 and redesignated former item 3126 as 3127.
Pub. L. 99-272, title XIII, 13205(a)(2)(A)(iii), Apr. 7, 1986, 100 Stat. 315, inserted “States,” in item 3125.
1965--Pub. L. 89-97, title III, 317(c)(3), July 30, 1965, 79 Stat. 389, inserted reference to the District of Columbia in item 3125.
1960--Pub. L. 86-778, title I, 103(q)(2), Sept. 13, 1960, 74 Stat. 940, added item 3125 and redesignated former item 3125 as 3126.
AMENDMENTS
2018 - Subsec. (b)(20)-(22). Pub. L. 115-243, Sec. 2(b)(2)(A), amended subsec. (b) by striking “or” at the end of par. (20), by substituting “; or” for the period at the end of par. (21), and by adding par. (22).
Subsec. (d)(4). Pub. L. 115-243, Sec. 2(b)(2)(B), amended par. (4) by inserting “or 218A” after “section 218”.
Subsec. (b)(5)(B)(i)(V). Pub. L. 115-141, Div. U, Sec. 401(a)(209), amended subpar. (5)(B)(i)(V) by substituting “section 104(e)(2)” for “section 105(e)(2)”.
Subsec. (b)(5)(H)(i). Pub. L. 115-141, Div. U, Sec. 401(a)(210), amended subpar. (5)(H)(i) by substituting “1997,” for “1997”.
Subsec. (b)(5)(E). Pub. L. 115-141, Div. U, Sec. 401(a)(325)(A), amended subpar. (E) by substituting “United States Court of Federal Claims” for “United States Claims Court”.
2014 - Subsec. (a)(17). Pub. L. 113-295, Div. A, Sec. 221(a)(19)(B)(iv), struck par. (17). Before being struck, it read as follows:
“(17) any contribution, payment, or service provided by an employer which may be excluded from the gross income of an employee, his spouse, or his dependents, under the provisions of section 120 (relating to amounts received under qualified group legal services plans);”.
Subsec. (b)(17). Pub. L. 113-295, Div. A, Sec. 221(a)(99)(C)(i), struck par. (17). Before being struck, it read as follows:
“(17) service in the employ of any organization which is performed (A) in any year during any part of which such organization is registered, or there is in effect a final order of the Subversive Activities Control Board requiring such organization to register, under the Internal Security Act of 1950, as amended, as a Communist-action organization, a Communist-front organization, or a Communist-infiltrated organization, and (B) after June 30, 1956;”.
2008 - Subsec. (b)(5)(E). Pub. L. 110-458, Sec. 108(k)(1), amended subpar. (E) by striking “or special trial judge”.
Subsec. (a)(21)-(23). Pub. L. 110-245, Sec. 115(a)(1), amended subsec. (a) by striking “or” at the end of par. (21); by substituting “; or” for the period at the end of par. (22); and by adding par. (23).
Subsec. (z). Pub. L. 110-245, Sec. 302(a), added subsec. (z).
2007 — Subsec. (v)(1)(A). Pub. L. 110-172, Sec. 8(a)(2), amended subpar. (A) by inserting “or consisting of designated Roth contributions (as defined in section 402A(c))” before the comma at the end.
2006 - Subsec. (b)(5)(E). Pub. L. 109-280, Sec. 854(c)(8), amended subpar. (E) by inserting “or special trial judge” before “of the United States Tax Court”.
2004 - Subsec. (a)(18). Pub. L. 108-375, Sec. 585(b)(2)(B), amended par. (18) by substituting “134(b)(4), or 134(b)(5)” for “or 134(b)(4)”.
Subsec. (a)(20)-(22). Pub. L. 108-357, Sec. 251(a)(1), amended subsec. (a) by striking “or” at the end of par. (20); by inserting “; or” for the period at the end of par. (21); and by adding par. (22).
Subsec. (a)(20). Pub. L. 108-357, Sec. 320(b)(1), amended par. (20) by inserting “108(f)(4),” after “74(c),”.
Subsec. (v)(2)(A). Pub. L. 108-357, Sec. 251(a)(1), amended subpar. (A) by inserting “or to any specified stock compensation (as defined in section 4985) on which tax is imposed by section 4985" before the period.
Subsec. (a)(7)(B). Pub. L. 108-203, Sec. 423(a), amended subpar. (B) by substituting “on a farm operated for profit" for “described in subsection (g)(5)”.
Subsec. (g)(5). Pub. L. 108-203, Sec. 423(c), amended par. (5) by striking “or is domestic service in a private home of the employer” at the end.
2003 - Subsec. (a)(18). Pub. L. 108-121, Sec. 106(b), amended par. (18) by substituting “, 129, or 134(b)(4)” for “or 129”.
2000 - Subsec. (a)(5)(G). Pub. L. 106-554, Sec. 319(15), substituted a comma for the semicolon at the end of subpar. (G).
1998 - Subsec. (a)(5). Pub. L. 105-206, Sec. 6023(13), amended par. (5) by substituting a semicolon for the comma at the end of subpar. (F); by striking “or” at the end of subpar. (G); and by substituting a semicolon for a period at the end of subpar. (I).
1997 - Subsec. (b)(5)(H)(i). Pub. L. 105-61, Sec. 642(d)(2), substituted a comma for “or” after “1986”, and inserted “or the Federal Employees Retirement System Open Enrollment Act of 1997” after “(50 U.S.C. 2157),”.
1996 - Subsec. (a)(5)(F)-(H). Pub. L. 104-188, Sec. 1421(b)(8), struck “or” at the end of subpar. (F); added “or” at the end of subpar. (G); and added subpar. (H).
Subsec. (a)(5)(G)-(I). Pub. L. 104-188, Sec. 1458(b), struck “or” at the end of subpar. (G); added “or” at the end of subpar. (H); and added subpar. (I).
Subsec. (b). Pub. L. 104-188, Sec. 1116(a)(1), added the sentence at the end.
Subsec. (b)(20)(A). Pub. L. 104-188, Sec. 1116(a)(1), amended subpar. (A). Before amendment, subpar. (A) read as follows:
“(A) such individual does not receive any cash remuneration other than as provided in subparagraph (B)),”.
1994 - Subsec. (b)(10)(B). Pub. L. 103-296, Sec. 108(h)(2), amended this section by striking ‘Secretary of Health and Human Services’ each place it appeared and inserting ‘Commissioner of Social Security’, effective March 31, 1995.
Subsec. (b)(7)(F)(iv). Pub. L. 103-296, Sec. 303(a)(2), struck out ‘$100’ and inserted ‘$1,000 with respect to service performed during any calendar year commencing on or after January 1, 1995, ending on or before December 31, 1999, and the adjusted amount determined under section 218(c)(8)(B) of the Social Security Act for any calendar year commencing on or after January 1, 2000, with respect to service performed during such calendar year’, effective for service performed on or after January 1, 1995.
Subsec. (u)(2)(B)(ii)(V). Pub. L. 103-296, Sec. 303(b)(2), struck out ‘$100’ and inserted ‘$1,000 with respect to service performed during any calendar year commencing on or after January 1, 1995, ending on or before December 31, 1999, and the adjusted amount determined under section 218(c)(8)(B) of the Social Security Act for any calendar year commencing on or after January 1, 2000, with respect to service performed during such calendar year’, effective for service performed on or after January 1, 1995.
Subsec. (y). Pub. L. 103-296, Sec. 319(a)(1), added new subsection (y), effective with respect to service performed after the calendar quarter in which the date of enactment of this Act occurred (August 15, 1994).
Subsec. (b)(15). Pub. L. 103-296, Sec. 319(a)(5), inserted ‘except service which constitutes ‘employment’ under subsection (y)' after ‘organization’, effective with respect to service performed after the calendar quarter following the calendar quarter in which the date of enactment of this Act occurred (August 15, 1994).
Subsec. (b)(19). Pub. L. 103-296, Sec. 320(a)(1)(C), struck out ‘(J), or (M)’ and substituted ‘(J), (M), or (Q)’, effective with the calendar quarter following the date of enactment of this Act (August 15, 1994).
Subsec. (a)(7)(B). Pub. L. 103-387, Sec. 2(a)(1)(A) amended (a)(7)(B) to read as above, effective for remuneration paid after December 31, 1993.
Subsec. (x). Pub. L. 103-387, Sec. 2(a)(1)(B) added subsec. (x), effective for remuneration paid after December 31, 1993.
Subsec. (b)(19), (20), (21). Pub. L. 103-387, Sec. 2(a)(1)(C) struck out the ‘or’ at the end of paragraph (19), struck out the period at the end of paragraph (20) and inserted ‘; or’, and added new paragraph (21), effective for services performed after December 31, 1994.
1993 - Subsec. (b)(5)(H)(i). Pub. L. 103-178, Sec. 204, substituted “section 307 of the Central Intelligence Agency Retirement Act (50 U.S.C. 2157)” for “section 307 of the Central Intelligence Agency Retirement Act of 1964”.
Subsec. (x). Pub. L. 103-66, Sec. 13207(a)(2), struck subsec. (x). Prior to amendment, 3121(x) read as follows:
“(x) Applicable contribution base--For purposes of this chapter--
“(1) Old-age, survivors, and disability insurance--For purposes of the taxes imposed by sections 3101(a) and 3111(a), the applicable contribution base for any calendar year is the contribution and benefits base determined under section 230 of the Social Security Act for such calendar year.
“(2) Hospital insurance--For purposes of the taxes imposed by section 3101(b) and 3111(b), the applicable contribution base is--
“(A) $125,000 for calendar year 1991, and
“(B) for any calendar year after 1991, the applicable contribution base for the preceding year adjusted in the same manner as is used in adjusting the contribution and benefit base under section 230(b) of the Social Security Act.
1992 - Subsec. (b)(5)(E). Pub. L. 102-572, Sec. 9902(b)(1), amended subpar. (E) by substituting “United States Court of Federal Claims” for “United States Claims Court”.
1990 - Subsec. (d). Pub. L. 101-508 added subsec. (d).
1988 - Subsec. (b)(5)(H). Pub. L. 100-647, Sec. 8015(b)(2), amended subpar. (H). Prior to amendment it read as follows:
“(H) service performed by an individual on or after the effective date of an election by such individual under section 301(a) of the Federal Employees' Retirement System Act of 1986, or under regulations issued under section 860 of the Foreign Service Act of 1980 or section 307 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, to become subject to chapter 84 of title 5, United States Code.”
1986 - Subsec. (b)(5). Pub. L. 99-335, Sec. 304(b), amended par. (5) by striking “or” at the end of subpar. (F); by substituting “; or” for “;” at the end of subpar. (G), and by adding subpar. (H).
1977 - Subsec. (a). Pub. L. 95-216, Sec. 355(a), substituted ‘cash remuneration to which paragraph (7)(B) of section 3121(a) is applicable’ for ‘cash remuneration to which paragraph (7)(B) or (C) or (10) of section 3121(a) is applicable’ and inserted ‘and an employer who in any calendar year pays to an employee cash remuneration to which paragraph (7)(C) or (10) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of such remuneration paid to the employee by the employer in the calendar year is less than $100;’.
Subsec. (c)(1), (2). Pub. L. 95-216, Sec. 355(b)(1), substituted ‘year’ for ‘quarter’ wherever appearing.
Subsec. (c)(3)(A). Pub. L. 95-216, Sec. 355(b)(2)(A), substituted ‘in any calendar year’ for ‘in any quarter of the calendar year’.
Subsec. (c)(3)(B), (C). Pub. L. 95-216, Sec. 355(b)(2)(B), substituted ‘year’ for ‘quarter’ wherever appearing.
1976 - Subsec. (c)(3). Pub. L. 94-455 struck out ‘or his delegate’ after ‘Secretary’.
1965 - Subsec. (a). Pub. L. 89-97, Sec. 313(c)(2), inserted provisions at end of second sentence allowing a deduction from any wages of an employee of an amount equivalent to the tax on tips when an employer is furnished with a written statement of tips received by an employee.
Subsec. (c). Pub. L. 89-97, Sec. 313(c)(1), added subsec. (c).
1956 - Subsec. (a). Act Aug. 1, 1956, substituted ‘$150 and the employee has not performed agricultural labor for the employer on 20 days or more in the calendar year for cash remuneration computed on a time basis’ for ‘$100’.
1954 - Subsec. (a). Act Sept. 1, 1954, inserted last sentence permitting in certain instances an employer to deduct employee tax even though payment to employee is less than $50 for calendar quarter or $100 for calendar year.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendments by Pub. L. 115-243, Sec. 2(b)(2), effective on September 20, 2018.
Amendments by Pub. L. 115-141, Div. U, Sec. 401(a)(209), (210), (325)(A), effective March 23, 2018.
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 2008 AMENDMENTS
Amendment by Sec. 108(k)(1) of Pub. L. 110-458 effective as if included in the provisions of the Pension Protection Act of 2006 [Pub. L. 109-280, Sec. 854] to which it relates [Effective on Aug. 17, 2006].
Amendments by Sec. 115(a)(1) of Pub. L. 110-245 effective as if included in the provisions of the Mortgage Forgiveness Debt Relief Act of 2007 [Pub. L. 110-142, Sec. 5] to which it relates [Effective for taxable years beginning after December 31, 2007].
Amendment by Sec. 302(a) of Pub. L. 110-245 effective for services performed in calendar months beginning more than 30 days after the date of the enactment of this Act [Enacted: June 17, 2008].
EFFECTIVE DATE OF 2007 AMENDMENT
Amendment by Sec. 8(a)(2) of Pub. L. 110-172 effective as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [Pub. L. 106-17, Sec. 617] to which it relates.
EFFECTIVE DATE OF 2006 AMENDMENTS
Amendment by Sec. 854 of Pub. L. 109-280 effective on the date of the enactment of this Act [Enacted: Aug. 17, 2006].
EFFECTIVE DATE OF 2004 AMENDMENTS
Amendments by Sec. 585(b)(2)(B) of Pub. L. 108-375 effective for travel benefits provided after the date of the enactment of this Act [Enacted: Oct. 28, 2004].
Amendments by Sec. 251(a) of Pub. L. 108-357 effective for stock acquired pursuant to options exercised after the date of the enactment of this Act [Enacted: Oct. 22, 2004].
Amendment by Sec. 320(b) of Pub. L. 108-357 effective for amounts received by an individual in taxable years beginning after December 31, 2003.
Amendment by Sec. 802(c) of Pub. L. 108-357 effective on March 4, 2003; except that periods before such date shall not be taken into account in applying the periods in subsections (a) and (e)(1) of section 4985 of the Internal Revenue Code of 1986, as added by this section.
Amendments by Sec. 423 of Pub. L. 108-203 effective on the date of the enactment of this Act [Enacted: Mar. 2, 2004].
EFFECTIVE DATE OF 2003 AMENDMENT
Amendment by Sec. 106(b) of Pub. L. 108-121 effective for taxable years beginning after December 31, 2002.
Section 106(d) of Pub. L. 108-121 provided that:
“(d) No INFERENCE-No inference may be drawn from the amendments made by this section with respect to the tax treatment of any amounts under the program described in section 134(b)(4) of the Internal Revenue Code of 1986 (as added by this section) for any taxable year beginning before January 1, 2003.”
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendments by Sec. 6023(13) of Pub. L. 105-206 effective on the date of the enactment of this Act [enacted: July 22, 1998].
EFFECTIVE DATE OF 1997 AMENDMENT
Section 642(d)(2) of Pub. L. 105-61 effective on October 10, 1997.
EFFECTIVE DATE OF 1996 AMENDMENTS
Section 1421(e) of Pub. L. 104-188 provided that: “The amendments made by this section shall apply to taxable years beginning after December 31, 1996.
Section 1458(c)(2) of Pub. L. 104-188 provided that: “The amendments made by subsection (b) shall apply to remuneration paid after December 31, 1996.
Section 1116(a)(3) of Pub. L. 104-188 provided that: “The amendments made by this subsection shall apply to remuneration paid--
(i) after December 31, 1994, and
(ii) after December 31, 1984, and before January 1, 1995, unless the payor treated such remuneration (when paid) as being subject to tax under chapter 21 of the Internal Revenue Code of 1986.
EFFECTIVE DATE OF 1993 AMENDMENTS
Section 204(c) of Pub. L. 103-178 effective on December 3, 1993.
Section 13207 of Pub. L. 103-66 effective for 1994 and later calendar years.
EFFECTIVE DATE OF 1992 AMENDMENT
Amendment by Pub. L. 102-572 effective on October 29, 1992.
EFFECTIVE DATE OF 1990 AMENDMENT
Section 5124(c) of Pub. L. 101-508 provided that: ‘The amendments made by this section (amending this section and section 3202 of this title) shall apply to coverage provided after December 31, 1990.’
EFFECTIVE DATE OF 1977 AMENDMENT
Section 355(c) of Pub. L. 95-216 provided that: ‘The amendments made by this section (amending this section) shall apply with respect to remuneration paid and to tips received after December 31, 1977.’
EFFECTIVE DATE OF 1965 AMENDMENT
Amendment by Pub. L. 89-97 applicable only with respect to tips received by employees after 1965, see section 313(f) of Pub. L. 89-97, set out as an Effective Date note under section 6053 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 Codeof 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 Codeof 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 Codeof 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).”
CLARIFICATION OF STANDARD TO BE USED IN DETERMINING EMPLOYMENT TAX STATUS OF SECURITIES BROKERS
Sec. 921 of Pub. L. 105-34 provided that:
“(a) In General.--In determining for purposes of the Internal Revenue Code of 1986 whether a registered representative of a securities broker-dealer is an employee (as defined in section 3121(d) of the Internal Revenue Code of 1986), no weight shall be given to instructions from the service recipient which are imposed only in compliance with investor protection standards imposed by the Federal Government, any State government, or a governing body pursuant to a delegation by a Federal or State agency.
(b) Effective Date.--Subsection (a) shall apply to services performed after December 31, 1997.”
TREATMENT OF CERTAIN UNIVERSITY ACCOUNTS
Section 1802(a) of Pub. L. 104-188, effective for remunerations paid after December 31, 1996, provided that: ‘For purposes of subsection (s) of section 3121 of the Internal Revenue Code of 1986 (relating to concurrent employment by 2 or more employers)--
(1) the following entities shall be deemed to be related corporations that concurrently employ the same individual:
(A) a State university which employs health professionals as faculty members at a medical school, and
(B) an agency account of a State university which is described in subparagraph (A) and from which there is distributed to such faculty members payments forming a part of the compensation that the State, or such State university, as the case may be, agrees to pay to such faculty members, but only if--
(i) such agency account is authorized by State law and receives the funds for such payments from a faculty practice plan described in section 501(c)(3) of the Code and exempt from tax under section 501(a) of the Code,
(ii) such payments are distributed by such agency account to such faculty members who render patient care at such medical school, and
(iii) such faculty members comprise at least 30 percent of the membership of such faculty practice plan, and
(2) remuneration which is disbursed by such agency account to any such faculty member of the medical school described in paragraph (1)(A) shall be deemed to have been actually disbursed by the State, or such State university, as the case may be, as a common paymaster and not to have been actually disbursed by such agency account.'