26 U.S.C. § 3121 : US Code - Section 3121: Definitions

Search 26 U.S.C. § 3121 : US Code - Section 3121: Definitions

(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 -
(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;
(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 -
(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
(B) medical or hospitalization expenses in connection with
sickness or accident disability, or
(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;
[(3) Repealed. Pub. L. 98-21, title III, Sec. 324(a)(3)(B),
Apr. 20, 1983, 97 Stat. 123]
(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;
(5) any payment made to, or on behalf of, an employee or his
beneficiary -
(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,
(B) under or to an annuity plan which, at the time of such
payment, is a plan described in section 403(a),
(C) under a simplified employee pension (as defined in
section 408(k)(1)), other than any contributions described in
section 408(k)(6),
(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),
(E) under or to an exempt governmental deferred compensation
plan (as defined in subsection (v)(3)),
(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,
(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,
(H) under an arrangement to which section 408(p) applies,
other than any elective contributions under paragraph (2)(A)(i)
thereof, or
(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));
(6) the payment by an employer (without deduction from the
remuneration of the employee) -
(A) of the tax imposed upon an employee under section 3101,
or
(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;
(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;
(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;
(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);
(8)(A) remuneration paid in any medium other than cash for
agricultural labor;
(B) cash remuneration paid by an employer in any calendar year
to an employee for agricultural labor unless -
(i) the cash remuneration paid in such year by the employer
to the employee for such labor is $150 or more, or
(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;
[(9) Repealed. Pub. L. 98-21, title III, Sec. 324(a)(3)(B),
Apr. 20, 1983, 97 Stat. 123]
(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;
(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));
(12)(A) tips paid in any medium other than cash;
(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;
(13) any payment or series of payments by an employer to an
employee or any of his dependents which is paid -
(A) upon or after the termination of an employee's employment
relationship because of (i) death, or (ii) retirement for
disability, and
(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;
(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;
(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;
(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;
(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);
(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);
(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;
(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;
(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); or
(22) remuneration on account of -
(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
(B) any disposition by the individual of such stock.
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.
(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 -
(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;
(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;
(3)(A) service performed by a child under the age of 18 in the
employ of his father or mother;
(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) 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
(ii) a son, daughter, stepson, or stepdaughter of such
employer is living in the home, and
(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;
(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;
(5) service performed in the employ of the United States or any
instrumentality of the United States, if such service -
(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
(B) is performed by an individual who -
(i) has been continuously performing service described in
subparagraph (A) since December 31, 1983, and for purposes of
this clause -
(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,
(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),
(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),
(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
(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 105(e)(2) (!1) of the Indian Self-Determination Act
applies, then the service performed for that tribal
organization shall be considered service described in
subparagraph (A); or
(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 -
(C) service performed as the President or Vice President of
the United States,
(D) service performed -
(i) in a position placed in the Executive Schedule under
sections 5312 through 5317 of title 5, United States Code,
(ii) as a noncareer appointee in the Senior Executive
Service or a noncareer member of the Senior Foreign Service,
or
(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,
(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,
(F) service performed as a Member, Delegate, or Resident
Commissioner of or to the Congress,
(G) any other service in the legislative branch of the
Federal Government if such service -
(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
(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
(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
(H) service performed by an individual -
(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 (!2) to become subject to the Federal Employees'
Retirement System provided in chapter 84 of title 5, United
States Code, or
(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;
(6) service performed in the employ of the United States or any
instrumentality of the United States if such service is performed
-
(A) in a penal institution of the United States by an inmate
thereof;
(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
(C) by any individual as an employee serving on a temporary
basis in case of fire, storm, earthquake, flood, or other
similar emergency;
(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 -
(A) service which, under subsection (j), constitutes covered
transportation service,
(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) 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
(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,
(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) in a hospital or penal institution by a patient or
inmate thereof;
(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;
(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
(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,
(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,
(E) service included under an agreement entered into pursuant
to section 218 of the Social Security Act, or
(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) by an individual who is employed to relieve such
individual from unemployment;
(ii) in a hospital, home, or other institution by a patient
or inmate thereof;
(iii) by any individual as an employee serving on a
temporary basis in case of fire, storm, snow, earthquake,
flood, or other similar emergency;
(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
(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;
(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;
(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));
(9) service performed by an individual as an employee or
employee representative as defined in section 3231;
(10) service performed in the employ of -
(A) a school, college, or university, or
(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;
(11) service performed in the employ of a foreign government
(including service as a consular or other officer or employee or
a nondiplomatic representative);
(12) service performed in the employ of an instrumentality
wholly owned by a foreign government -
(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
(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;
(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;
(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;
(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;
(15) service performed in the employ of an international
organization, except service which constitutes "employment" under
subsection (y);
(16) service performed by an individual under an arrangement
with the owner or tenant of land pursuant to which -
(A) such individual undertakes to produce agricultural or
horticultural commodities (including livestock, bees, poultry,
and fur-bearing animals and wildlife) on such land,
(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
(C) the amount of such individual's share depends on the
amount of the agricultural or horticultural commodities
produced;
(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;
(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));
(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;
(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 -
(A) such individual does not receive any cash remuneration
other than as provided in subparagraph (B) and other than cash
remuneration -
(i) which does not exceed $100 per trip;
(ii) which is contingent on a minimum catch; and
(iii) which is paid solely for additional duties (such as
mate, engineer, or cook) for which additional cash
remuneration is traditional in the industry,
(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
(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; or
(21) domestic service in a private home of the employer which -

(A) is performed in any year by an individual under the age
of 18 during any portion of such year; and
(B) is not the principal occupation of such employee.
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.
(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).
(d) Employee
For purposes of this chapter, the term "employee" means -
(1) any officer of a corporation; or
(2) any individual who, under the usual common law rules
applicable in determining the employer-employee relationship, has
the status of an employee; or
(3) any individual (other than an individual who is an employee
under paragraph (1) or (2)) who performs services for
remuneration for any person -
(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;
(B) as a full-time life insurance salesman;
(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
(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
(4) any individual who performs services that are included
under an agreement entered into pursuant to section 218 of the
Social Security Act.
(e) State, United States, and citizen
For purposes of this chapter -
(1) State
The term "State" includes the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, and
American Samoa.
(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.
(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.
(g) Agricultural labor
For purposes of this chapter, the term "agricultural labor"
includes all service performed -
(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;
(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;
(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;
(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;
(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;
(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
(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.
(h) American employer
For purposes of this chapter, the term "American employer" means
an employer which is -
(1) the United States or any instrumentality thereof,
(2) an individual who is a resident of the United States,
(3) a partnership, if two-thirds or more of the partners are
residents of the United States,
(4) a trust, if all of the trustees are residents of the United
States, or
(5) a corporation organized under the laws of the United States
or of any State.
(i) Computation of wages in certain cases
(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).
(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.
(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.
(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.
(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.
(j) Covered transportation service
For purposes of this chapter -
(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.
(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 -
(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
(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 -
(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
(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).
(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.
(4) Definitions
For purposes of this subsection -
(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.
(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.
(C) The term "political subdivision" includes an
instrumentality of -
(i) a State,
(ii) one or more political subdivisions of a State, or
(iii) a State and one or more of its political
subdivisions.
[(k) Repealed. Pub. L. 98-21, title I, Sec. 102(b)(2), Apr. 20,
1983, 97 Stat. 71]
(l) Agreements entered into by American employers with respect to
foreign affiliates
(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 -
(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
(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.
(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).
(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.
(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 -
(A) paid for services covered by an agreement entered into
pursuant to paragraph (1) as would be wages if the services
constituted employment, and
(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.
(5) Overpayments and underpayments
(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.
(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.
(6) Foreign affiliate defined
For purposes of this subsection and section 210(a) of the
Social Security Act -
(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.
(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) in the case of a corporation, in the voting stock
thereof, and
(ii) in the case of any other entity, in the profits
thereof.
(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.
(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.
(m) Service in the uniformed services
For purposes of this chapter -
(1) Inclusion of service
The term "employment" shall, notwithstanding the provisions of
subsection (b) of this section, include -
(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
(B) service performed by an individual as a member of a
uniformed service on inactive duty training.
(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.
(3) Inactive duty training
The term "inactive duty training" means "inactive duty
training" as described in paragraph (23) of such section 101.
(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 -
(1) a retired member of any of those services;
(2) a member of the Fleet Reserve or Fleet Marine Corps
Reserve;
(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;
(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
(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 -
(A) who has been provisionally accepted for such duty; or
(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.
(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.
(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.
(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.
(r) Election of coverage by religious orders
(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 -
(A) such election of coverage by such order or subdivision
shall be irrevocable;
(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;
(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
(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).
(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.
(3) Effective date for election
(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) the first day of the calendar quarter in which the
certificate is filed,
(ii) the first day of the calendar quarter succeeding such
quarter, or
(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.
(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) 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
(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, Sec. 102(b)(3)(B), Apr.
20, 1983, 97 Stat. 71]
(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.
[(t) Repealed. Pub. L. 100-203, title IX, Sec. 9006(b)(2), Dec. 22,
1987, 101 Stat. 1330-289]
(u) Application of hospital insurance tax to Federal, State, and
local employment
(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.
(2) State and local employment
For purposes of the taxes imposed by sections 3101(b) and
3111(b) -
(A) In general
Except as provided in subparagraphs (B) and (C), subsection
(b) shall be applied without regard to paragraph (7) thereof.
(B) Exception for certain services
Service shall not be treated as employment by reason of
subparagraph (A) if -
(i) the service is included under an agreement under
section 218 of the Social Security Act, or
(ii) the service is performed -
(I) by an individual who is employed by a State or
political subdivision thereof to relieve him from
unemployment,
(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,
(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,
(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,
(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
(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.
(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) such service would be excluded from the term
"employment" for purposes of this chapter if subparagraph (A)
did not apply;
(ii) such service is performed by an individual -
(I) who was performing substantial and regular service
for remuneration for that employer before April 1, 1986,
(II) who is a bona fide employee of that employer on
March 31, 1986, and
(III) whose employment relationship with that employer
was not entered into for purposes of meeting the
requirements of this subparagraph; and
(iii) the employment relationship with that employer has
not been terminated after March 31, 1986.
(D) Treatment of agencies and instrumentalities
For purposes of subparagraph (C), under regulations -
(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.
(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).
(3) Medicare qualified government employment
For purposes of this chapter, the term "medicare qualified
government employment" means service which -
(A) is employment (as defined in subsection (b)) with the
application of paragraphs (1) and (2), but
(B) would not be employment (as so defined) without the
application of such paragraphs.
(v) Treatment of certain deferred compensation and salary reduction
arrangements
(1) Certain employer contributions treated as wages
Nothing in any paragraph of subsection (a) (other than
paragraph (1)) shall exclude from the term "wages" -
(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
(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).
(2) Treatment of certain nonqualified deferred compensation plans
(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) when the services are performed, or
(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.
(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.
(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).
(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 -
(A) any plan to which section 83, 402(b), 403(c), 457(a), or
457(f)(1) applies,
(B) any annuity contract described in section 403(b), and
(C) the Thrift Savings Fund (within the meaning of subchapter
III of chapter 84 of title 5, United States Code).
(w) Exemption of churches and qualified church-controlled
organizations
(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.
(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.
(3) Definitions
(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.
(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) 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
(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.
(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.
(y) Service in the employ of international organizations by certain
transferred Federal employees
(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 -
(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
(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.
(2) Definitions
For purposes of this subsection -
(A) Federal agency
The term "Federal agency" means an agency, as defined in
section 3581(1) of title 5, United States Code.
(B) International organization
The term "international organization" has the meaning
provided such term by section 3581(3) of title 5, United States
Code.