42 U.S.C. § 409 : US Code - Section 409: "Wages" defined

Search 42 U.S.C. § 409 : US Code - Section 409: "Wages" defined

(a) In general
For the purposes of this subchapter, the term "wages" means
remuneration paid prior to 1951 which was wages for the purposes of
this subchapter under the law applicable to the payment of such
remuneration, and remuneration paid after 1950 for employment,
including the cash value of all remuneration (including benefits)
paid in any medium other than cash; except that, in the case of
remuneration paid after 1950, such term shall not include -
(1)(A) That part of remuneration which, after remuneration
(other than remuneration referred to in the succeeding
subsections of this section) equal to $3,600 with respect to
employment has been paid to an individual during any calendar
year prior to 1955, is paid to such individual during such
calendar year;
(B) That part of remuneration which, after remuneration (other
than remuneration referred to in the succeeding subsections of
this section) equal to $4,200 with respect to employment has been
paid to an individual during any calendar year after 1954 and
prior to 1959, is paid to such individual during such calendar
year;
(C) That part of remuneration which, after remuneration (other
than remuneration referred to in the succeeding subsections of
this section) equal to $4,800 with respect to employment has been
paid to an individual during any calendar year after 1958 and
prior to 1966, is paid to such individual during such calendar
year;
(D) That part of remuneration which, after remuneration (other
than remuneration referred to in the succeeding subsections of
this section) equal to $6,600 with respect to employment has been
paid to an individual during any calendar year after 1965 and
prior to 1968, is paid to such individual during such calendar
year;
(E) That part of remuneration which, after remuneration (other
than remuneration referred to in the succeeding subsections of
this section) equal to $7,800 with respect to employment has been
paid to an individual during any calendar year after 1967 and
prior to 1972, is paid to such individual during such calendar
year;
(F) That part of remuneration which, after remuneration (other
than remuneration referred to in the succeeding subsections of
this section) equal to $9,000 with respect to employment has been
paid to an individual during any calendar year after 1971 and
prior to 1973, is paid to such individual during any such
calendar year;
(G) That part of remuneration which, after remuneration (other
than remuneration referred to in the succeeding subsections of
this section) equal to $10,800 with respect to employment has
been paid to an individual during any calendar year after 1972
and prior to 1974, is paid to such individual during such
calendar year;
(H) That part of remuneration which, after remuneration (other
than remuneration referred to in the succeeding subsections of
this section) equal to $13,200 with respect to employment has
been paid to an individual during any calendar year after 1973
and prior to 1975, is paid to such individual during such
calendar year;
(I) That part of remuneration which, after remuneration (other
than remuneration referred to in the succeeding subsections of
this section) equal to the contribution and benefit base
(determined under section 430 of this title) with respect to
employment has been paid to an individual during any calendar
year after 1974 with respect to which such contribution and
benefit base is effective, is paid to such individual during such
calendar year;
(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 clause shall exclude from
the term "wages" only payments which are received under a
workmen's compensation law), or (B) medical or hospitalization
expenses in connection with sickness or accident disability, or
(C) death, except that this subsection 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 under
the Internal Revenue Code of 1986;
(3) 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 six calendar
months following the last calendar month in which the employee
worked for such employer;
(4) Any payment made to, or on behalf of, an employee or his
beneficiary (A) from or to a trust exempt from tax under section
165(a) of the Internal Revenue Code of 1939 at the time of such
payment or, in the case of a payment after 1954, under sections
401 and 501(a) of the Internal Revenue Code of 1954 or the
Internal Revenue Code of 1986, 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, or (B) under
or to an annuity plan which, at the time of such payment, meets
the requirements of section 165(a)(3), (4), (5), and (6) of the
Internal Revenue Code of 1939 or, in the case of a payment after
1954 and prior to 1963, the requirements of section 401(a)(3),
(4), (5), and (6) of the Internal Revenue Code of 1954, or (C)
under or to an annuity plan which, at the time of any such
payment after 1962, is a plan described in section 403(a) of the
Internal Revenue Code of 1986, or (D) under or to a bond purchase
plan which, at the time of any such payment after 1962, is a
qualified bond purchase plan described in section 405(a) of the
Internal Revenue Code of 1954 (as in effect before July 18,
1984), or (E) under or to an annuity contract described in
section 403(b) of the Internal Revenue Code of 1986, 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), or (F) under or to an exempt
governmental deferred compensation plan (as defined in section
3121(v)(3) of such Code), or (G) to supplement pension benefits
under a plan or trust described in any of the foregoing
provisions of this subsection 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 [29 U.S.C. 1002(2)(B)(ii)], or (H)
under a simplified employee pension (as defined in section
408(k)(1) of such Code), other than any contributions described
in section 408(k)(6) of such Code, or (I) under a cafeteria plan
(within the meaning of section 125 of the Internal Revenue Code
of 1986) 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; or (J)
under an arrangement to which section 408(p) of such Code
applies, other than any elective contributions under paragraph
(2)(A)(i) thereof; or (K) under a plan described in section
457(e)(11)(A)(ii) of the Internal Revenue Code of 1986 and
maintained by an eligible employer (as defined in section
457(e)(1) of such Code);
(5) The payment by an employer (without deduction from the
remuneration of the employee) -
(A) of the tax imposed upon an employee under section 3101 of
the Internal Revenue Code of 1986, 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;
(6)(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 section 3121(x) of the
Internal Revenue Code of 1986) 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 paragraph, 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 section 410(f)(5) of this title;
(7)(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;
(8) Remuneration paid by an employer in any year to an employee
for service described in section 410(j)(3)(C) of this title
(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;
(9) 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 of the Internal Revenue Code of 1986
(determined without regard to section 274(n) of such Code);
(10)(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;
(11) 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 (A) (!1) death, or (B) (!1) 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;
(12) 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;
(13) 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 423(a) of this title 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;
(14)(A) Remuneration paid by an organization exempt from income
tax under section 501 of the Internal Revenue Code of 1986 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;
(B) 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 of the Internal Revenue Code of 1986 (relating to
amounts received under qualified group legal services plans);
(15) 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 or 129 of the Internal Revenue Code of 1986;
(16) 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 of the Internal Revenue
Code of 1986;
(17) 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 of the
Internal Revenue Code of 1986;
(18) Remuneration consisting of income excluded from taxation
under section 7873 of the Internal Revenue Code of 1986 (relating
to income derived by Indians from exercise of fishing rights); or
(19) 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) of the Internal Revenue Code of 1986) or under
an employee stock purchase plan (as defined in section 423(b)
of such Code), or
(B) any disposition by the individual of such stock.
(b) Regulations providing exclusions from term
Nothing in the regulations prescribed for purposes of chapter 24
of the Internal Revenue Code of 1986 (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
subchapter.
(c) Individuals performing domestic services
For purposes of this subchapter, in the case of domestic service
described in subsection (a)(6)(B) of this section, 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 subchapter, 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)(6)(B) of this section.
(d) Members of uniformed services
For purposes of this subchapter, in the case of an individual
performing service, as a member of a uniformed service, to which
the provisions of section 410(l)(1) of this title 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 (1) his basic pay as described in chapter 3
and section 1009 of title 37 in the case of an individual
performing service to which subparagraph (A) of such section
410(l)(1) of this title applies, or (2) his compensation for such
service as determined under section 206(a) of title 37 in the case
of an individual performing service to which subparagraph (B) of
such section 410(l)(1) of this title applies.
(e) Peace Corps volunteers
For purposes of this subchapter, in the case of an individual
performing service, as a volunteer or volunteer leader within the
meaning of the Peace Corps Act [22 U.S.C. 2501 et seq.], to which
the provisions of section 410(o) of this title are applicable, (1)
the term "wages" shall, subject to the provisions of subsection (a)
of this section, include as such individual's remuneration for such
service only amounts certified as payable pursuant to section 5(c)
or 6(1) of the Peace Corps Act [22 U.S.C. 2504(c) or 2505(1)], and
(2) any such amount shall be deemed to have been paid to such
individual at the time the service, with respect to which it is
paid, is performed.
(f) Tips
For purposes of this subchapter, tips received by an employee in
the course of his employment shall be considered remuneration for
employment. 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) of the Internal Revenue Code
of 1986 or (if no statement including such tips is so furnished) at
the time received.
(g) Members of religious orders
For purposes of this subchapter, in any case where an individual
is a member of a religious order (as defined in section 3121(r)(2)
of the Internal Revenue Code of 1986) performing service in the
exercise of duties required by such order, and an election of
coverage under section 3121(r) of such Code 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) of this section,
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.
(h) Retired justices and judges
For purposes of this subchapter, in the case of an individual
performing service under the provisions of section 294 of title 28
(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) Employer contributions under sections 401(k) and 414(h)(2) of
Internal Revenue Code
Nothing in any of the foregoing provisions of this section (other
than subsection (a) of this section) shall exclude from the term
"wages" -
(1) Any employer contribution under a qualified cash or
deferred arrangement (as defined in section 401(k) of the
Internal Revenue Code of 1986) to the extent not included in
gross income by reason of section 402(a)(8) of such Code, or
(2) Any amount which is treated as an employer contribution
under section 414(h)(2) of such Code where the pickup referred to
in such section is pursuant to a salary reduction agreement
(whether evidenced by a written instrument or otherwise).
(j) Amounts deferred under nonqualified deferred compensation plans
Any amount deferred under a nonqualified deferred compensation
plan (within the meaning of section 3121(v)(2)(C) of the Internal
Revenue Code of 1986) shall be taken into account for purposes of
this subchapter as of the later of when the services are performed,
or when there is no substantial risk of forfeiture of the rights to
such amount. Any amount taken into account as wages by reason of
the preceding sentence (and the income attributable thereto) shall
not thereafter be treated as wages for purposes of this subchapter.
(k) "National average wage index" and "deferred compensation
amount" defined
(1) For purposes of sections 403(f)(8)(B)(ii), 413(d)(2)(B),
415(a)(1)(B)(ii), 415(a)(1)(C)(ii), 415(a)(1)(D), 415(b)(3)(A)(ii),
415(i)(1)(E), 415(i)(2)(C)(ii), 424a(f)(2)(B), and 430(b)(2) (and
430(b)(2) of this title as in effect immediately prior to the
enactment of the Social Security Amendments of 1977), the term
'national average wage index' for any particular calendar year
means, subject to regulations of the Commissioner of Social
Security under paragraph (2), the average of the total wages for
such particular calendar year.
(2) The Commissioner of Social Security shall prescribe
regulations under which the national average wage index for any
calendar year shall be computed -
(A) on the basis of amounts reported to the Secretary of the
Treasury or his delegate for such year,
(B) by disregarding the limitation on wages specified in
subsection (a)(1) of this section,
(C) with respect to calendar years after 1990, by incorporating
deferred compensation amounts and factoring in for such years the
rate of change from year to year in such amounts, in a manner
consistent with the requirements of section 10208 of the Omnibus
Budget Reconciliation Act of 1989, and
(D) with respect to calendar years before 1978, in a manner
consistent with the manner in which the average of the total
wages for each of such calendar years was determined as provided
by applicable law as in effect for such years.
(3) For purposes of this subsection, the term "deferred
compensation amount" means -
(A) any amount excluded from gross income under chapter 1 of
the Internal Revenue Code of 1986 by reason of section
402(a)(8),(!2) 402(h)(1)(B), or 457(a) of such Code or by reason
of a salary reduction agreement under section 403(b) of such
Code,
(B) any amount with respect to which a deduction is allowable
under chapter 1 of such Code by reason of a contribution to a
plan described in section 501(c)(18) of such Code, and
(C) to the extent provided in regulations of the Commissioner
of Social Security, deferred compensation provided under any
arrangement, agreement, or plan referred to in subsection (i) or
(j) of this section.