26 U.S.C. § 3121: Definitions

Cases: United States v. Cleveland Indians Baseball Co., 532 U.S. 200 (2001)

Forms: Form 2032; Form 941; Form W-2

Final rules 12

(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—

§ 31.3121(a)-1 Wages.§ 31.3121(a)-1T Question and answer relating to the definition of wages in section 3121(a) (Temporary).§ 31.3121(a)-2 Wages; when paid and received.§ 31.3121(a)-3 Reimbursement and other expense allowance amounts.§ 31.3121(a)(1)-1 Annual wage limitation.§ 31.3121(a)(2)-1 Payments on account of sickness or accident disability, medical or hospitalization expenses, or death.§ 31.3121(a)(3)-1 Retirement payments.§ 31.3121(a)(4)-1 Payments on account of sickness or accident disability, or medical or hospitalization expenses.§ 31.3121(a)(5)-1 Payments from or to certain tax-exempt trusts, or under or to certain annuity plans or bond purchase plans.§ 31.3121(a)(5)-2 Payments under or to an annuity contract described in section 403(b).§ 31.3121(a)(6)-1 Payment by an employer of employee tax under section 3101 or employee contributions under a State law.§ 31.3121(a)(7)-1 Payments for services not in the course of employer's trade or business or for domestic service.§ 31.3121(a)(8)-1 Payments for agricultural labor.§ 31.3121(a)(10)-1 Payments to certain home workers.§ 31.3121(a)(11)-1 Moving expenses.§ 31.3121(a)(12)-1 Tips.§ 31.3121(a)(13)-1 Payments under certain employers' plans after retirement, disability, or death.§ 31.3121(a)(14)-1 Payments by employer to survivor or estate of former employee.§ 31.3121(a)(15)-1 Payments by employer to disabled former employee.§ 31.3121(a)(18)-1 Payments or benefits under a qualified educational assistance program.Prop. § 31.3121(a)(5)-2 Proposed 2004 · Payments under or to an annuity contract described in section 403(b).

Amended 1981, 1983, 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 531(d)(1)(A)(i), inserted “(including benefits)” before “paid in any medium” in introductory provisions.
1983 Pub. L. 98-21 Pub. L. 98–21, § 327(b)(1), inserted in text following last numbered paragraph a provision that 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 regulations prescribed for purposes of this chapter.
1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(3)(D), substituted reference to subpar. (A) of par. (2) for reference to subpar. (B) thereof in text following last numbered paragraph.
1981 Pub. L. 97-123 Pub. L. 97–123 inserted “(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 workmen’s compensation law)” after “sickness or accident disability” in par. (2)(B), and inserted, after par. (18), the following provision: “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 (B) of paragraph (2) shall be treated for purposes of this chapter and chapter 22 as the employer with respect to such wages.”

Cited by 78

(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;

Amended 1954, 1958, 1965, 1968, 1971, 1972, 1973, 1990, 1993

1993 Pub. L. 103-66 Pub. L. 103–66, § 13207(a)(1), inserted “in the case of the taxes imposed by sections 3101(a) and 3111(a)” after “(1)”, substituted “contribution and benefit base (as determined under section 230 of the Social Security Act)” for “applicable contribution base (as determined under subsection (x))” in two places, and substituted “such contribution and benefit base” for “such applicable contribution base”.
1990 Pub. L. 101-508 Pub. L. 101–508, § 11331(a)(1), substituted “applicable contribution base (as determined under subsection (x))” for “contribution and benefit base (as determined under section 230 of the Social Security Act)” wherever appearing and “such applicable contribution base” for “such contribution and benefit base”.
1973 Pub. L. 93-233 Pub. L. 93–233, § 5(b)(2), effective with respect to remuneration paid after 1973, substituted “$13,200” for “$12,600” in two places.
1973 Pub. L. 93-233 Pub. L. 93–233, § 5(d), applicable only with respect to remuneration paid after 1973 (as provided in section 5(e) of Pub. L. 93–233, set out as a note under section 409 of Title 42), amended section 203(b)(2)(C) of the Pub. L. 92–336 (set out as 1973 Amendment note hereunder) substituting “$13,200” for “$12,600”.
1973 Pub. L. 93-66 Pub. L. 93–66, § 203(b)(2), effective with respect to remuneration paid after 1973, substituted “$12,600” for “$12,000” in two places.
1973 Pub. L. 93-66 Pub. L. 93–66, § 203(d), applicable only with respect to remuneration paid after, and taxable years beginning after, 1973 (as provided in section 203(e) of Pub. L. 93–66, set out as a note under section 409 of Title 42), amended section 203(b)(2)(C) of Pub. L. 92–336 (set out as 1972 Amendment note hereunder) substituting “$12,600” for “$12,000”.
1972 Pub. L. 92-336 Pub. L. 92–336, § 203(b)(2)(A), substituted “$10,800” for “$9,000” in two places.
1972 Pub. L. 92-336 Pub. L. 92–336, § 203(b)(2)(B), effective with respect to remuneration paid after 1973, substituted “$12,000” for “$10,800” in two places.
1972 Pub. L. 92-336 Pub. L. 92–336, § 203(b)(2)(C), effective with respect to remuneration paid after 1974, substituted “the contribution and benefit base (as determined under section 230 of the Social Security Act)” for “$12,000” in two places, and “the calendar year with respect to which such contribution and benefit base is effective” for “any calendar year”.
1971 Pub. L. 92-5 Pub. L. 92–5 substituted “$9,000” for “$7,800” in two places.
1968 Pub. L. 90-248 Pub. L. 90–248, § 108(b)(2), substituted “$7,800” for “$6,600” wherever appearing.
1965 Pub. L. 89-97 Pub. L. 89–97, § 320(b)(2), substituted “$6,600” for “$4,800” wherever appearing.
1958 Pub. L. 85-840 Pub. L. 85–840, § 402(b), substituted “$4,800” for “$4,200” wherever appearing.
1954 Act Sept. 1, 1954, § 204(a), substituted “$4,200” for “$3,600” wherever appearing.

Cited by 19

(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—

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(3)(A), struck out “(A) retirement, or”, and redesignated subpars. (B) to (D) as (A) to (C), respectively.

Cited by 3

(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

Cited by 8

(B) medical or hospitalization expenses in connection with sickness or accident disability, or

Cited by 2

(C) death, except that this paragraph does not apply to a payment for group-term life insurance to the extent that such payment is includible in the gross income of the employee;

Amended 1987

1987 Pub. L. 100-203 Pub. L. 100–203, § 9003(a)(2), substituted “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” for “death”.

[(3) Repealed. Pub. L. 98–21, title III, § 324(a)(3)(B), Apr. 20, 1983, 97 Stat. 123]

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(3)(B), struck out par. (3) which related to any payment made to an employee (including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment) on account of retirement.

(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;

Cited by 3

(5) any payment made to, or on behalf of, an employee or his beneficiary—

Cited by 7

(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,

Cited by 3

(B) under or to an annuity plan which, at the time of such payment, is a plan described in section 403(a),

Cited by 1

(C) under a simplified employee pension (as defined in section 408(k)(1)), other than any contributions described in section 408(k)(6),

Amended 1984, 1986

1986 Pub. L. 99-514 Pub. L. 99–514, § 1108(g)(7), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “under a simplified employee pension if, at the time of the payment, it is reasonable to believe that the employee will be entitled to a deduction under section 219(b)(2) for such payment,”.
1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(36), struck out subpar. (C) which provided: “under or to a bond purchase plan which, at the time of such payment, is a qualified bond purchase plan described in section 405(a),” and redesignated subpars, (D) to (G) as (C) to (F), respectively.

Cited by 1

(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),

Amended 1980, 1983, 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(36), struck out subpar. (C) which provided: “under or to a bond purchase plan which, at the time of such payment, is a qualified bond purchase plan described in section 405(a),” and redesignated subpars, (D) to (G) as (C) to (F), respectively.
1983 Pub. L. 98-21 Pub. L. 98–21, § 328(a), substituted “section 219(b)(2)” for “section 219”.
1980 Pub. L. 96-222 Pub. L. 96–222 added subpar. (D).

Cited by 9

(E) under or to an exempt governmental deferred compensation plan (as defined in subsection (v)(3)),

Amended 1983, 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(36), struck out subpar. (C) which provided: “under or to a bond purchase plan which, at the time of such payment, is a qualified bond purchase plan described in section 405(a),” and redesignated subpars, (D) to (G) as (C) to (F), respectively.
1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(2), added subpars. (E) to (G).

Cited by 1

(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,

Amended 1983, 1984, 1987, 1996, 1998

1998 Pub. L. 105-206 Pub. L. 105–206, § 6023(13)(A), which directed the substitution of a comma for the semicolon at end of subpar. (F), could not be executed because a semicolon did not appear at end of subpar. (F).
1996 Pub. L. 104-188 Pub. L. 104–188, § 1421(b)(8)(A), struck out “or” at end.
1987 Pub. L. 100-203 Pub. L. 100–203, § 9023(d)(1), substituted a comma for semicolon before “or” at end.
1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(36), struck out subpar. (C) which provided: “under or to a bond purchase plan which, at the time of such payment, is a qualified bond purchase plan described in section 405(a),” and redesignated subpars, (D) to (G) as (C) to (F), respectively.
1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(2), added subpars. (E) to (G).

(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,

Amended 1983, 1984, 1986, 1987, 1988, 1996, 1998, 2000

2000 Pub. L. 106-554 Pub. L. 106–554 substituted a comma for the semicolon at end.
1998 Pub. L. 105-206 Pub. L. 105–206, § 6023(13)(B), struck out “or” at end.
1996 Pub. L. 104-188 Pub. L. 104–188, § 1458(b)(1), which directed that subpar. (G) be amended by striking “(or)” at the end, could not be executed because “(or)” did not appear.
1996 Pub. L. 104-188 Pub. L. 104–188, § 1421(b)(8)(A), inserted “or” at end.
1988 Pub. L. 100-647 Pub. L. 100–647, § 1011B(a)(23)(A), inserted “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” after “section 125)”.
1987 Pub. L. 100-203 Pub. L. 100–203, § 9023(d)(2), substituted a semicolon for comma at end.
1986 Pub. L. 99-514 Pub. L. 99–514, § 1151(d)(2)(A), added subpar. (G).
1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(36), struck out subpar. (C) which provided: “under or to a bond purchase plan which, at the time of such payment, is a qualified bond purchase plan described in section 405(a),” and redesignated subpars, (D) to (G) as (C) to (F), respectively.
1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(2), added subpars. (E) to (G).

(H) under an arrangement to which section 408(p) applies, other than any elective contributions under paragraph (2)(A)(i) thereof, or

Amended 1996

1996 Pub. L. 104-188 Pub. L. 104–188, § 1458(b)(1), inserted “or” at end.
1996 Pub. L. 104-188 Pub. L. 104–188, § 1421(b)(8)(A), added subpar. (H).

(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));

Amended 1996, 1998

1998 Pub. L. 105-206 Pub. L. 105–206, § 6023(13)(C), substituted a semicolon for the period at end.
1996 Pub. L. 104-188 Pub. L. 104–188, § 1458(b)(1), added subpar. (I).

(6) the payment by an employer (without deduction from the remuneration of the employee)—

Amended 1980

1980 Pub. L. 96-499 Pub. L. 96–499 struck out “(or the corresponding section of prior law)” after “section 3101” in subpar. (A) and inserted “with respect to remuneration paid to an employee for domestic service in a private home of the employer or for agricultural labor” after subpar. (B).

(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;

Amended 1954, 1994, 2004

2004 Pub. L. 108-203 Pub. L. 108–203, § 423(a), substituted “on a farm operated for profit” for “described in subsection (g)(5)”.
1994 Pub. L. 103-387 Pub. L. 103–387, § 2(a)(1)(A), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “cash remuneration paid by an employer in any calendar quarter to an employee for domestic service in a private home of the employer, if the cash remuneration paid in such quarter by the employer to the employee for such service is less than $50. As used in this subparagraph, the term ‘domestic service in a private home of the employer’ does not include service described in subsection (g)(5);”.
1954 Act Sept. 1, 1954, § 204(b)(1), made coverage of domestic service dependent solely on receipt of $50 in cash wages in a calendar quarter by an employee from an employer for such service.

Cited by 4

(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);

Amended 1954, 1977

1977 Pub. L. 95-216 Pub. L. 95–216, § 356(a), substituted “year” for “quarter” and “$100” for “$50”, wherever appearing.
1954 Act Sept. 1, 1954, § 204(b)(2), added subpar. (C).

Cited by 1

(8)

Amended 1954, 1986

1986 Pub. L. 99-514 Pub. L. 99–514, § 1883(a)(11)(B), realigned margin of subpar. (B).
1954 Act Sept. 1, 1954, § 204(b)(3), designated existing provisions as subpar. (A) and added subpar. (B).

(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—

Amended 1956, 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 8017(b), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “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;”.
1956 Act Aug. 1, 1956, ch. 836, § 201(h)(1), included within definition of wages cash remuneration of $150 or more, and cash remuneration computed on a time basis where the employee performs agricultural labor for the employer on 20 days or more during the calendar year.

Cited by 2

(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,

Amended 1987

1987 Pub. L. 100-203 Pub. L. 100–203, § 9002(b), added cl. (ii) and struck out former cl. (ii) which read as follows: “the employee performs agricultural labor for the employer on 20 days or more during such year for cash remuneration computed on a time basis;”.

Cited by 1

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, § 324(a)(3)(B), Apr. 20, 1983, 97 Stat. 123]

Amended 1956, 1972, 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(3)(B), struck out par. (9) which related to any payment (other than vacation or sick pay) made to an employee after the month in which he attained age 62, if such employee did not work for the employer in the period for which such payment was made.
1972 Pub. L. 92-603 Pub. L. 92–603, § 104(i), substituted uniform provision of 62 years of age, for separate provisions for men and women of 65 and 62 years, respectively.
1956 Act Aug. 1, 1956, ch. 836, § 201(b), excluded payments made to a woman after she attains the age of 62.

(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;

Amended 1977

1977 Pub. L. 95-216 Pub. L. 95–216, § 356(a), substituted “year” for “quarter” and “$100” for “$50”, wherever appearing.

Cited by 1

(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));

Amended 1964, 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 1001(g)(4)(B)(i), inserted “(determined without regard to section 274(n))” after “section 217”.
1964 Pub. L. 88-650 Pub. L. 88–650 added par. (11).
1964 Pub. L. 88-272 Pub. L. 88–272 substituted “is a plan described in section 403(a), or” for “meets the requirements of section 401(a)(3), (4), (5), and (6)” in subpar. (5)(B), and added subpar. (5)(C).

(12)

Amended 1965

1965 Pub. L. 89-97 Pub. L. 89–97, § 313(c)(3), added par. (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;

Cited by 1

(13) any payment or series of payments by an employer to an employee or any of his dependents which is paid—

Amended 1968

1968 Pub. L. 90-248 Pub. L. 90–248, § 504(a), added par. (13).

Cited by 2

(A) upon or after the termination of an employee’s employment relationship because of (i) death, or (ii) retirement for disability, and

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(3)(C), struck out cl. (iii) which related to the case of retirement after attaining an age specified in the plan referred to in subparagraph (B) or in a pension plan of the employer.

(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;

Amended 1972

1972 Pub. L. 92-603 Pub. L. 92–603, § 122(b), added par. (14).

(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;

Amended 1972

1972 Pub. L. 92-603 Pub. L. 92–603, § 138(b), added par. (15).

(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;

Amended 1977

1977 Pub. L. 95-216 Pub. L. 95–216, § 356(b), added par. (16).

[(17) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(19)(B)(iv), Dec. 19, 2014, 128 Stat. 4040]

Amended 1978, 2014

2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(19)(B)(iv), struck out par. (17) which read as follows: “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);”.
1978 Pub. L. 95-472 Pub. L. 95–472 added par. (17).

(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);

Amended 1978, 1981, 2003, 2004

2004 Pub. L. 108-375 Pub. L. 108–375 substituted “134(b)(4), or 134(b)(5)” for “or 134(b)(4)”.
2003 Pub. L. 108-121 Pub. L. 108–121 substituted “, 129, or 134(b)(4)” for “or 129”.
1981 Pub. L. 97-34 Pub. L. 97–34 substituted “section 127 or 129” for “section 127”.
1978 Pub. L. 95-600 Pub. L. 95–600 added par. (18).

(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;

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 327(a)(1), added par. (19).

(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;

Amended 1984, 1986, 2004

2004 Pub. L. 108-357 Pub. L. 108–357, § 320(b)(1), inserted “108(f)(4),” after “74(c),”.
1986 Pub. L. 99-514 Pub. L. 99–514, § 122(e)(1), inserted reference to section 74(c).
1984 Pub. L. 98-369 Pub. L. 98–369, § 531(d)(1)(A)(ii), added par. (20).

(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);

Amended 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 3043(c)(2), added par. (21).

(22) remuneration on account of—

Amended 2004

2004 Pub. L. 108-357 Pub. L. 108–357, § 251(a)(1)(A), added par. (22).

(A) a transfer of a share of stock to any individual pursuant to an exercise of an incentive stock option (as defined in section 422(b)) or under an employee stock purchase plan (as defined in section 423(b)), or

(B) any disposition by the individual of such stock; or

(23) any benefit or payment which is excludable from the gross income of the employee under section section [OLRC note: So in original.] 139B(a).

Amended 2008, 2019

2019 Pub. L. 116-94 Pub. L. 116–94 substituted “section 139B(a)” for “139B(b)”.
2008 Pub. L. 110-245 Pub. L. 110–245, § 115(a)(1), added par. (23).

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—

§ 31.3121(b)-1 Employment; services to which the regulations in this subpart apply.§ 31.3121(b)-2 Employment; services performed before 1955.§ 31.3121(b)-3 Employment; services performed after 1954.§ 31.3121(b)-4 Employment; excepted services in general.§ 31.3121(b)(1)-1 Certain services performed by foreign agricultural workers, or performed before 1959 in connection with oleoresinous products.§ 31.3121(b)(2)-1 Domestic service performed by students for certain college organizations.§ 31.3121(b)(3)-1 Family employment.§ 31.3121(b)(4)-1 Services performed on or in connection with a non-American vessel or aircraft.§ 31.3121(b)(5)-1 Services in employ of an instrumentality of the United States specifically exempted from the employer tax.§ 31.3121(b)(6)-1 Services in employ of United States or instrumentality thereof.§ 31.3121(b)(7)-1 Services in employ of States or their political subdivisions or instrumentalities.§ 31.3121(b)(7)-2 Service by employees who are not members of a public retirement system.§ 31.3121(b)(8)-1 Services performed by a minister of a church or a member of a religious order.§ 31.3121(b)(9)-1 Railroad industry; services performed by an employee or an employee representative as defined in section 3231.§ 31.3121(b)(10)-1 Services for remuneration of less than $50 for calendar quarter in the employ of certain organizations exempt from income tax.§ 31.3121(b)(10)-2 Services performed by certain students in the employ of a school, college, or university, or of a nonprofit organization auxiliary to a school, college, or university.§ 31.3121(b)(11)-1 Services in the employ of a foreign government.§ 31.3121(b)(12)-1 Services in employ of wholly owned instrumentality of foreign government.§ 31.3121(b)(13)-1 Services of student nurse or hospital intern.§ 31.3121(b)(14)-1 Services in delivery or distribution of newspapers, shopping news, or magazines.§ 31.3121(b)(15)-1 Services in employ of international organization.§ 31.3121(b)(16)-1 Services performed under share-farming arrangement.§ 31.3121(b)(17)-1 Services in employ of Communist organization.§ 31.3121(b)(18)-1 Services performed by a resident of the Republic of the Philippines while temporarily in Guam.§ 31.3121(b)(19)-1 Services of certain nonresident aliens.§ 31.3121(b)(20)-1 Service performed on a boat engaged in catching fish.

Amended 1976, 1983, 1996

1996 Pub. L. 104-188 Pub. L. 104–188, § 1116(a)(1)(A), inserted closing provisions “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.”
1983 Pub. L. 98-21 Pub. L. 98–21, § 323(a)(1), substituted “a citizen or resident of the United States” for “a citizen of the United States” in text preceding par. (1).
1983 Pub. L. 98-21 Pub. L. 98–21, § 322(a)(2), added cl. (C) in text preceding par. (1).
1976 Pub. L. 94-455 Pub. L. 94–455, § 1903(a)(3)(A), substituted “, of whatever nature, performed” for “performed after 1936 and prior to 1955 which was employment for purposes of subchapter A of chapter 9 of the Internal Revenue Code of 1939 under the law applicable to the period in which such service was performed, and any service, of whatever nature, performed after 1954” in introductory text.

Cited by 35

(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;

Amended 1954, 1956, 1958, 1976, 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(i)(1), struck out “(A) under contracts entered into in accordance with title V of the Agricultural Act of 1949, as amended (7 U.S.C. 1461–1468), or (B)”.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1903(a)(3)(B), struck out “65 Stat. 119;” before “7 U.S.C. 1461–1468”.
1958 Pub. L. 85-840 Pub. L. 85–840, § 404(a), struck out provisions which excluded from definition of “employment” service performed in connection with the production or harvesting of any commodity defined as an agricultural commodity in section 1141j of title 12.
1956 Act Aug. 1, 1956, ch. 836, § 201(c), excepted from term “employment” services performed by foreign agricultural workers lawfully admitted from any foreign country or possession thereof, on a temporary basis to perform agricultural labor.
1954 Act Sept. 1, 1954, § 205(a), made coverage of agricultural labor depend solely on the payment of cash remuneration of $100 or more per year, thereby eliminating the need for an agricultural laborer to have served a qualifying calendar quarter and to have worked on a full time basis for 60 days during a succeeding calendar quarter and to have received $50 or more for his labor during such succeeding calendar quarter, removed the specific exception from employment of services performed in connection with the ginning of cotton, and added an exception for services performed by West Indian agricultural workers lawfully admitted to the United States on a temporary basis.

Cited by 3

(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;

Cited by 3

(3)

Amended 1954, 1960

1960 Pub. L. 86-778 Pub. L. 86–778, § 104(b), designated existing provisions as cl. (A) and struck out provisions which related to service performed by an individual in the employ of his son or daughter, and added cl. (B).
1954 Act Sept. 1, 1954, § 205(b), struck out par. (3) and redesignated pars. (4) to (14) as (3) to (13), respectively.

Cited by 1

(A) service performed by a child under the age of 18 in the employ of his father or mother;

Amended 1987

1987 Pub. L. 100-203 Pub. L. 100–203, § 9005(b)(1), substituted “18” for “21”.
1987 Pub. L. 100-203 Pub. L. 100–203, § 9004(b)(1), struck out “performed by an individual in the employ of his spouse, and service” after “service”.

Cited by 1

(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—

Amended 1968, 1987

1987 Pub. L. 100-203 Pub. L. 100–203, § 9005(b)(2), inserted “under the age of 21 in the employ of his father or mother, or performed by an individual” after first reference to “individual”.
1987 Pub. L. 100-203 Pub. L. 100–203, § 9004(b)(2), inserted introductory provisions and struck out former introductory provisions which read as follows: “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 in the employ of his son or daughter; except that the provisions of this subparagraph shall not be applicable to such domestic service if—”.
1968 Pub. L. 90-248 Pub. L. 90–248, § 123(b), provided for inclusion of family employment in a private home in definition of “employment,” upon compliance with conditions described in cls. (i) to (iii).

(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

Cited by 2

(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;

Amended 1954

1954 Act Sept. 1, 1954, § 205(c), amended par. (4), as redesignated, to make the exception with respect to services on non-American vessels or aircraft applicable only if the individual is not a United States citizen or the employer is not an American employer.

Cited by 2

(5) service performed in the employ of the United States or any instrumentality of the United States, if such service—

Amended 1983, 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 8015(c)(2), inserted “any such service performed on or after any date on which such individual performs” after “with respect to” in provision preceding subpar. (C).
1983 Pub. L. 98-21 Pub. L. 98–21, § 101(b)(1), amended par. (5) generally. Prior to amendment par. (5) read as follows: “Service performed in the employ of any instrumentality of the United States, if such instrumentality is exempt from the tax imposed by section 3111 by virtue of any provision of law which specifically refers to such section (or the corresponding section of prior law) in granting such exemption;”.

Cited by 4

(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

Cited by 6

(B) is performed by an individual who—

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2601(b)(1), in amending subpar. (B) generally, substituted provision broadening social security coverage for newly hired Federal civilian employees effective with remuneration paid after Dec. 31, 1983, by providing that persons transferring from other government service to civilian service be covered under social security, unless the other service was in an international organization, or the person is returning to civilian service after temporary military or reserve duty and is exercising his reemployment rights under chapter 43 of title 38.

Cited by 1

(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 104(e)(2) of the Indian Self-Determination Act applies, then the service performed for that tribal organization shall be considered service described in subparagraph (A); or

Amended 1985, 2018

2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(209), substituted “section 104(e)(2)” for “section 105(e)(2)”.
1985 Pub. L. 99-221 Pub. L. 99–221 added subcl. (V).

(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—

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2601(b)(2), substituted subpar. designations (C) to (G) for former designations (i) to (v), respectively, in subpar. (D), as so redesignated, redesignated cls. (I) to (III) as (i) to (iii), respectively, and amended generally, subpar. (G), as so redesignated, designating provision relating to service performed by an individual who is not subject to subchapter III of chapter 83 of title 5 as cl. (i), and in cl. (i) as so designated, inserting reference to another retirement system established by a law of the United States for Federal employees, other than for members of the uniformed services and adding cls. (ii) and (iii), and provision for determining for purposes of this subparagraph whether an individual is subject to subchapter III of chapter 83 of title 5 or any other retirement system.

(D) service performed—

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2601(b)(2), substituted subpar. designations (C) to (G) for former designations (i) to (v), respectively, in subpar. (D), as so redesignated, redesignated cls. (I) to (III) as (i) to (iii), respectively, and amended generally, subpar. (G), as so redesignated, designating provision relating to service performed by an individual who is not subject to subchapter III of chapter 83 of title 5 as cl. (i), and in cl. (i) as so designated, inserting reference to another retirement system established by a law of the United States for Federal employees, other than for members of the uniformed services and adding cls. (ii) and (iii), and provision for determining for purposes of this subparagraph whether an individual is subject to subchapter III of chapter 83 of title 5 or any other retirement system.

(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 or special trial judge of the United States Tax Court, a United States magistrate judge, or a referee in bankruptcy or United States bankruptcy judge,

Amended 1984, 2006, 2008, 2018, 2022

2022 Pub. L. 117-328 Pub. L. 117–328 inserted “or special trial judge” before “of the United States Tax Court”.
2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(325)(A), substituted “United States Court of Federal Claims” for “United States Claims Court”.
2008 Pub. L. 110-458 Pub. L. 110–458 struck out “or special trial judge” before “of the United States Tax Court”.
2006 Pub. L. 109-280 Pub. L. 109–280 inserted “or special trial judge” before “of the United States Tax Court”.
1984 Pub. L. 98-369 Pub. L. 98–369, § 2601(b)(2), substituted subpar. designations (C) to (G) for former designations (i) to (v), respectively, in subpar. (D), as so redesignated, redesignated cls. (I) to (III) as (i) to (iii), respectively, and amended generally, subpar. (G), as so redesignated, designating provision relating to service performed by an individual who is not subject to subchapter III of chapter 83 of title 5 as cl. (i), and in cl. (i) as so designated, inserting reference to another retirement system established by a law of the United States for Federal employees, other than for members of the uniformed services and adding cls. (ii) and (iii), and provision for determining for purposes of this subparagraph whether an individual is subject to subchapter III of chapter 83 of title 5 or any other retirement system.

(F) service performed as a Member, Delegate, or Resident Commissioner of or to the Congress,

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2601(b)(2), substituted subpar. designations (C) to (G) for former designations (i) to (v), respectively, in subpar. (D), as so redesignated, redesignated cls. (I) to (III) as (i) to (iii), respectively, and amended generally, subpar. (G), as so redesignated, designating provision relating to service performed by an individual who is not subject to subchapter III of chapter 83 of title 5 as cl. (i), and in cl. (i) as so designated, inserting reference to another retirement system established by a law of the United States for Federal employees, other than for members of the uniformed services and adding cls. (ii) and (iii), and provision for determining for purposes of this subparagraph whether an individual is subject to subchapter III of chapter 83 of title 5 or any other retirement system.

(G) any other service in the legislative branch of the Federal Government if such service—

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2601(b)(2), substituted subpar. designations (C) to (G) for former designations (i) to (v), respectively, in subpar. (D), as so redesignated, redesignated cls. (I) to (III) as (i) to (iii), respectively, and amended generally, subpar. (G), as so redesignated, designating provision relating to service performed by an individual who is not subject to subchapter III of chapter 83 of title 5 as cl. (i), and in cl. (i) as so designated, inserting reference to another retirement system established by a law of the United States for Federal employees, other than for members of the uniformed services and adding cls. (ii) and (iii), and provision for determining for purposes of this subparagraph whether an individual is subject to subchapter III of chapter 83 of title 5 or any other retirement system.

(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

Cited by 1

(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—

Amended 1986, 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 8015(b)(2), amended subpar. (H) generally. Prior to amendment, subparagraph (H) read as follows: “service performed by an individual on or after the effective date of an election by such individual under section 301(a) of the Federal Employees’ Retirement System Act of 1986, or under regulations issued under section 860 of the Foreign Service Act of 1980 or section 307 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees, to become subject to chapter 84 of title 5, United States Code;”.
1986 Pub. L. 99-335 Pub. L. 99–335 added subpar. (H).

(i) on or after the effective date of an election by such individual, under section 301 of the Federal Employees’ Retirement System Act of 1986, section 307 of the Central Intelligence Agency Retirement Act (50 U.S.C. 2157), or the Federal Employees’ Retirement System Open Enrollment Act of 1997, to become subject to the Federal Employees’ Retirement System provided in chapter 84 of title 5, United States Code, or

Amended 1993, 1997, 2018

2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(210), inserted comma after “1997”.
1997 Pub. L. 105-61 Pub. L. 105–61 substituted “1986,” for “1986 or” and inserted “or the Federal Employees’ Retirement System Open Enrollment Act of 1997” after “(50 U.S.C. 2157),”.
1993 Pub. L. 103-178 Pub. L. 103–178 substituted “section 307 of the Central Intelligence Agency Retirement Act (50 U.S.C. 2157)” for “section 307 of the Central Intelligence Agency Retirement Act of 1964 for Certain Employees”.

(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—

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 101(b)(1), amended par. (6) generally. Prior to amendment par. (6) read as follows:
1983 “(A) service performed in the employ of the United States or in the employ of any instrumentality of the United States, if such service is covered by a retirement system established by a law of the United States;
1983 “(B) service performed, by an individual in the employ of an instrumentality of the United States if such an instrumentality was exempt from the tax imposed by section 1410 of the Internal Revenue Code of 1939 on December 31, 1950, and if such service is covered by a retirement system established by such instrumentality; except that the provisions of this subparagraph shall not be applicable to—
“(i) service performed in the employ of a corporation which is wholly owned by the United States;
“(ii) service performed in the employ of a Federal land bank, a Federal intermediate credit bank, a bank for cooperatives, a Federal land bank association, a production credit association, a Federal Reserve Bank, a Federal Home Loan Bank, or a Federal Credit Union;
“(iii) service performed in the employ of a State, county, or community committee under the Commodity Stabilization Service;
“(iv) service performed by a civilian employee, not compensated from funds appropriated by the Congress, in the Army and Air Force Exchange Service, Army and Air Force Motion Picture Service, Navy Exchanges, Marine Corps Exchanges, or other activities, conducted by an instrumentality of the United States subject to the jurisdiction of the Secretary of Defense, at installations of the Department of Defense for the comfort, pleasure, contentment, and mental and physical improvement of personnel of such Department; or
“(v) service performed by a civilian employee, not compensated from funds appropriated by the Congress, in the Coast Guard Exchanges or other activities, conducted by an instrumentality of the United States subject to the jurisdiction of the Secretary of Transportation, at installations of the Coast Guard for the comfort, pleasure, contentment, and mental and physical improvement of personnel of the Coast Guard;
1983 “(C) service performed in the employ of the United States or in the employ of any instrumentality of the United States, if such service is performed—
“(i) as the President or Vice President of the United States or as a Member, Delegate, or Resident Commissioner of or to the Congress;
“(ii) in the legislative branch;
“(iii) in a penal institution of the United States by an inmate thereof;
“(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 Federal Government), other than as a medical or dental intern or a medical or dental resident in training;
“(v) by any individual as an employee serving on a temporary basis in case of fire, storm, earthquake, flood, or other similar emergency; or
“(vi) by any individual to whom subchapter III of chapter 83 of title 5, United States Code, does not apply because such individual is subject to another retirement system (other than the retirement system of the Tennessee Valley Authority);”.

Cited by 3

(A) in a penal institution of the United States by an inmate thereof;

Cited by 1

(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

Amended 1954, 1956, 1959, 1976

1976 Pub. L. 94-455 Pub. L. 94–455, § 1903(a)(3)(C), substituted “Secretary of Transportation” for “Secretary of the Treasury”.
1959 Pub. L. 86-168 Pub. L. 86–168 substituted “Federal land bank association” for “national farm loan association”, and included service in the employ of Federal land banks, Federal intermediate credit banks and banks for cooperatives.
1956 Act Aug. 1, 1956, ch. 836, § 201(d)(1), included service performed in the employ of a Federal Home Loan Bank.
1954 Act Sept. 1, 1954, § 205(d)(1)(A), amended par. (6), as redesignated, by inserting in subpar. (B) “by an individual” after “service is performed” and “and if such service is covered by a retirement system established by such instrumentality” after “December 31, 1950”.
1954 Act Sept. 1, 1954, § 205(d)(1)(B), amended par. (6), as redesignated, by adding cl. (v) to subpar. (B).

Cited by 2

(C) by any individual as an employee serving on a temporary basis in case of fire, storm, earthquake, flood, or other similar emergency;

Amended 1954, 1956, 1965, 1968

1968 Pub. L. 90-248 Pub. L. 90–248, § 403(i)(1), substituted “section 5351(2) of title 5, United States Code” for “section 2 of the Act of August 4, 1967” and struck out “; 5 U.S.C., sec. 1052” at end of parenthetical text.
1968 Pub. L. 90-248 Pub. L. 90–248, § 403(i)(2), substituted “subchapter III of chapter 83 of title 5, United States Code,” for “the Civil Service Retirement Act”.
1965 Pub. L. 89-97 Pub. L. 89–97, § 311(b)(4), inserted “, other than as a medical or dental intern or a medical or dental resident in training”.
1956 Act Aug. 1, 1956, ch. 836, § 201(d)(2), substituted “Civil Service Retirement Act” for “Civil Service Retirement Act of 1930”, and inserted “(other than the retirement system of the Tennessee Valley Authority)” after “retirement system”.
1954 Act Sept. 1, 1954, § 205(d)(2), struck out exception from coverage for services in the following categories: temporary employees in the Post Office Department field service; temporary census taking employees of the Bureau of the Census; Federal employees paid on a contract or fee basis; Federal employees receiving compensation of $12 a year or less; certain consular agents; individuals employed under Federal unemployment relief programs; and members of State, county, or community committees under the Commodity Stabilization Service and similar bodies, unless such bodies are composed exclusively of full-time Federal employees, and limited the exclusion of inmates or patients of United States institutions to inmates of penal institutions.

Cited by 1

(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—

Amended 1960

1960 Pub. L. 86-778 Pub. L. 86–778, § 103(n), excluded 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.

Cited by 10

(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—

Cited by 1

(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

Cited by 2

(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,

Cited by 1

(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—

Amended 1965, 1997, 1998

1998 Pub. L. 105-277 Pub. L. 105–277 added Pub. L. 105–33, § 11246(b)(2)(A). See 1997 Amendment note below.
1997 Pub. L. 105-33 Pub. L. 105–33, § 11246(b)(2)(A), as added by Pub. L. 105–277, inserted “(other than the Federal Employees Retirement System provided in chapter 84 of title 5, United States Code)” after “law of the United States” in introductory provisions.
1965 Pub. L. 89-97 Pub. L. 89–97, § 317(b)(3), added subpar. (C).

(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;

Amended 1968

1968 Pub. L. 90-248 Pub. L. 90–248, § 403(i)(3), substituted “section 5351(2) of title 5, United States Code” for “section 2 of the Act of August 4, 1947” and struck out “; 5 U.S.C. 1052” at end of parenthetical text.

(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,

Amended 1972

1972 Pub. L. 92-603 Pub. L. 92–603, § 128(b), added subpar. (D).

(E) service included under an agreement entered into pursuant to section 218 of the Social Security Act, or

Amended 1986

1986 Pub. L. 99-509 Pub. L. 99–509, § 9002(b)(1)(A), added subpar. (E).

(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—

Amended 1990

1990 Pub. L. 101-508 Pub. L. 101–508, § 11332(b), added subpar. (F).

Cited by 5

(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

Amended 1994

1994 Pub. L. 103-296 Pub. L. 103–296, § 303(a)(2), substituted “$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” for “$100”.

Cited by 1

(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)

Amended 1983, 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2603(a)(2), designated existing provisions as subpar. (A), substituted “this subparagraph” for “this paragraph”, and added subpar. (B).
1983 Pub. L. 98-21 Pub. L. 98–21, § 102(b)(1), struck out the subpar. (A) designation preceding “service performed”, struck out subpar. (B) which related to service performed by employees of nonprofit organizations, and in par. (8), as so designated substituted “except that this paragraph shall not apply” for “except that this subparagraph shall not apply”.

Cited by 3

(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;

Textual readingANY OF= service excluded from employment

“service performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry”

“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;”

Amended 1972

1972 Pub. L. 92-603 Pub. L. 92–603, § 123(a)(2), inserted provision that this subparagraph shall not apply to service performed by a member of such religious order in the exercise of such duties if an election of coverage under subsec. (r) is in effect with respect to such order, or with respect to the autonomous subdivision thereof to which such member belongs.

Cited by 6

(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));

Textual readingALL OF= excluded from employment

“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),”

NOT“service in an unrelated trade or business (within the meaning of section 513(a))”

Amended 1958, 1976

1976 Pub. L. 94-563 Pub. L. 94–563, § 1(b), inserted “or deemed to have been so filed under paragraph (4) or (5) of such subsection” after “filed pursuant to subsection (k) (or the corresponding subsection of prior law)” in provisions preceding cl. (i), inserted “(or deemed to have been filed)” after “filed” in cls. (i), (ii), and (iii), and substituted “is (or is deemed to be) in effect” for “is in effect” in provisions following cl. (iii).
1958 Pub. L. 85-840 Pub. L. 85–840, § 405(b), made subparagraph inapplicable to service performed during the period for which a certificate is in effect if such service is performed by an employee who, after the calendar quarter in which the certificate was filed with respect to a group described in section 321(k)(1)(E) of this title, became a member of such group, and made subparagraph applicable with respect to service performed by an employee as a member of a group described in section 3121(k)(1)(E) of this title with respect to which no certificate is in effect.

Cited by 4

(9) service performed by an individual as an employee or employee representative as defined in section 3231;

Cited by 5

(10) service performed in the employ of—

Amended 1977

1977 Pub. L. 95-216 Pub. L. 95–216, § 356(c), struck out subpar. (A) which related to service performed in any calendar quarter in the employ of any organization exempt from income tax under section 501(a) (other than an organization described in section 401(a) or under section 521, if the remuneration for such service was less than $50, struck out the designation “(B)” preceding the remainder of par. (10), and redesignated former cls. (i) and (ii) of former subpar. (B) as subpars. (A) and (B).

Cited by 6

(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;

Amended 1972, 1984, 1994

1994 Pub. L. 103-296 Pub. L. 103–296, § 108(h)(2), substituted “Commissioner of Social Security” for “Secretary of Health and Human Services”.
1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(j)(5)(C), substituted “Secretary of Health and Human Services” for “Secretary of Health, Education, and Welfare”.
1972 Pub. L. 92-603 Pub. L. 92–603, § 129(a)(2), inserted provisions relating to service performed in the employ of organizations described in section 509(a)(3) of this title.

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);

Cited by 2

(12) service performed in the employ of an instrumentality wholly owned by a foreign government—

Cited by 1

(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;

Amended 1976

1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(C), substituted “to the Secretary of the Treasury” for “to the Secretary”.

(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;

Amended 1965

1965 Pub. L. 89-97 Pub. L. 89–97, § 311(b)(5), struck out from the definition of employment the exclusion of service performed as an intern in the employ of a hospital by an individual who has completed a 4 years’ course in a medical school chartered or approved pursuant to State law.

Cited by 1

(14)

Amended 1954

1954 Act Sept. 1, 1954, § 205(e), struck out par. (15) and redesignated pars. (16) and (17) as (14) and (15), respectively.

(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;

Cited by 1

(15) service performed in the employ of an international organization, except service which constitutes “employment” under subsection (y);

Amended 1954, 1994

1994 Pub. L. 103-296 Pub. L. 103–296, § 319(a)(5), inserted “, except service which constitutes ‘employment’ under subsection (y)” after “international organization”.
1954 Act Sept. 1, 1954, § 205(e), struck out par. (15) and redesignated pars. (16) and (17) as (14) and (15), respectively.

Cited by 1

(16) service performed by an individual under an arrangement with the owner or tenant of land pursuant to which—

Amended 1954, 1956

1956 Act Aug. 1, 1956, ch. 836, §§ 201(e)(1), 121d, added pars. (16) and (17).
1954 Act Sept. 1, 1954, § 205(e), struck out par. (15) and redesignated pars. (16) and (17) as (14) and (15), respectively.

Cited by 1

(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) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(99)(C)(i), Dec. 19, 2014, 128 Stat. 4052]

Amended 1954, 1956, 1977, 2014

2014 Pub. L. 113-295 Pub. L. 113–295, § 221(a)(99)(C)(i), struck out par. (17) which read as follows: “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;”.
1977 Pub. L. 95-216 Pub. L. 95–216, § 356(d), substituted “year” for “quarter”.
1956 Act Aug. 1, 1956, ch. 836, §§ 201(e)(1), 121d, added pars. (16) and (17).
1954 Act Sept. 1, 1954, § 205(e), struck out par. (15) and redesignated pars. (16) and (17) as (14) and (15), respectively.

(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));

Amended 1960

1960 Pub. L. 86-778 Pub. L. 86–778, § 103(o), added par. (18).

(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;

Amended 1961, 1988, 1994

1994 Pub. L. 103-296 Pub. L. 103–296, § 320(a)(1)(C), substituted “(J), (M), or (Q)” for “(J), or (M)” in two places.
1988 Pub. L. 100-647 Pub. L. 100–647, § 1001(d)(2)(C)(i), substituted “(F), (J), or (M)” for “(F) or (J)” in two places.
1961 Pub. L. 87-256 Pub. L. 87–256 added par. (19).

(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—

Amended 1976, 1986, 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 8016(a)(4)(A), (C), made technical correction to directory language of Pub. L. 99–272, § 13303(c)(2), see 1986 Amendment note below.
1986 Pub. L. 99-272 Pub. L. 99–272, § 13303(c)(2), as amended by Pub. L. 100–647, § 8016(a)(4)(A), (C), inserted “(other than service described in paragraph (3)(A))” after “service”.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1207(e)(1)(A), added par. (20).

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(A) such individual does not receive any cash remuneration other than as provided in subparagraph (B) and other than cash remuneration—

Amended 1996

1996 Pub. L. 104-188 Pub. L. 104–188, § 1116(a)(1)(B), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “such individual does not receive any cash remuneration (other than as provided in subparagraph (B)),”.

Cited by 1

(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

Cited by 1

(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;

(21) domestic service in a private home of the employer which—

Amended 1994

1994 Pub. L. 103-387 Pub. L. 103–387, § 2(a)(1)(C), added par. (21).

(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; or

(22) service performed by members of Indian tribal councils as tribal council members in the employ of an Indian tribal government, except that this paragraph shall not apply in the case of service included under an agreement under section 218A of the Social Security Act.

Amended 2018

2018 Pub. L. 115-243 Pub. L. 115–243, § 2(b)(2)(A), added par. (22).

Cited by 2

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).

§ 31.3121(c)-1 Included and excluded services.

Amended 1954

1954 Act Sept. 1, 1954, § 205(b), substituted “subsection (b)(9)” for “subsection (b)(10)”.

Cited by 6

(d) Employee For purposes of this chapter, the term “employee” means—

Textual readingANY OF= an employee

(1) any officer of a corporation; or

Cited by 5

(2) any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee; or

Cited by 6

(3) any individual (other than an individual who is an employee under paragraph (1) or (2)) who performs services for remuneration for any person—

Amended 1986, 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 8016(a)(3)(A), redesignated par. (4) as (3) and substituted “; or” for a period at the end, and redesignated par. (3) as (4), substituted a period for “; or” at the end, and moved redesignated par. (4) to the end of the subsection.
1986 Pub. L. 99-509 Pub. L. 99–509, § 9002(b)(2)(A), added par. (3) and redesignated former par. (3) as (4).

Cited by 5

(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;

Cited by 1

(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

Amended 1954

1954 Act Sept. 1, 1954, § 206(a), struck out requirement that performance of services of homeworkers be subject to State licensing requirements.

Cited by 11

(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;

Cited by 1

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 or 218A of the Social Security Act.

Amended 1986, 1988, 2018

2018 Pub. L. 115-243 Pub. L. 115–243, § 2(b)(2)(B), inserted “or 218A” after “section 218”.
1988 Pub. L. 100-647 Pub. L. 100–647, § 8016(a)(3)(A), redesignated par. (4) as (3) and substituted “; or” for a period at the end, and redesignated par. (3) as (4), substituted a period for “; or” at the end, and moved redesignated par. (4) to the end of the subsection.
1986 Pub. L. 99-509 Pub. L. 99–509, § 9002(b)(2)(A), added par. (3) and redesignated former par. (3) as (4).

§ 31.3121(d)-1 Who are employees.§ 31.3121(d)-2 Who are employers.

Cited by 4

(e) State, United States, and citizen For purposes of this chapter—

§ 31.3121(e)-1 State, United States, and citizen.

Amended 1959, 1960

1960 Pub. L. 86-778 Pub. L. 86–778, § 103(p), struck out a reference to Hawaii in cl. (1), and included Guam and American Samoa and cls. (1) and (2).
1960 Pub. L. 86-624 Pub. L. 86–624 struck out “Hawaii,” before “the District of Columbia”, in cl. (1).
1959 Pub. L. 86-70 Pub. L. 86–70 struck out “Alaska,” before “Hawaii”.

(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.

Cited by 2

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.

§ 31.3121(f)-1 American vessel and aircraft.

(g) Agricultural labor For purposes of this chapter, the term “agricultural labor” includes all service performed—

Textual readingANY OF= agricultural labor

(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;

Cited by 1

(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;

Cited by 1

(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;

Amended 1976

1976 Pub. L. 94-455 Pub. L. 94–455, § 1903(a)(3)(D), struck out “46 Stat. 1550, § 3;” before “12 U.S.C. 1141j”.

Cited by 1

(4)

Cited by 1

(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;

Cited by 2

(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;

Amended 1977

1977 Pub. L. 95-216 Pub. L. 95–216, § 356(d), substituted “year” for “quarter”.

Cited by 1

(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.

Amended 2004

2004 Pub. L. 108-203 Pub. L. 108–203, § 423(c), struck out “or is domestic service in a private home of the employer” after “employer’s trade or business”.

Cited by 3

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.

§ 31.3121(g)-1 Agricultural labor.

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(h) American employer For purposes of this chapter, the term “American employer” means an employer which is—

“an employer which is—” Opening words

Textual readingANY OF= an american employer

(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,

“an employer which is—” Enclosing § 3121(h)

Textual readingALL OF= an american employer

“a partnership”

“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.

§ 31.3121(h)-1 American employer.

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(i) Computation of wages in certain cases

§ 31.3121(i)-1 Computation to nearest dollar of cash remuneration for domestic service.§ 31.3121(i)-2 Computation of remuneration for service performed by an individual as a member of a uniformed service.§ 31.3121(i)-3 Computation of remuneration for service performed by an individual as a volunteer or volunteer leader within the meaning of the Peace Corps Act.§ 31.3121(i)-4 Computation of remuneration for service performed by certain members of religious orders.

Amended 1956

1956 Act Aug. 1, 1956, ch. 837, § 410, designated existing provisions as par. (1) and added par. (2).

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(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.

Amended 1984, 1987

1987 Pub. L. 100-203 Pub. L. 100–203, § 9001(b)(2), substituted “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.” for “only his basic pay as described in chapter 3 and section 1009 of title 37, United States Code.”
1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(i)(2), substituted “chapter 3 and section 1009 of title 37, United States Code” for “section 102(10) of the Servicemen’s and Veterans’ Survivor Benefits Act”.

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(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.

Amended 1961

1961 Pub. L. 87-293 Pub. L. 87–293, § 202(a)(1), added par. (3).

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(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.

Amended 1972

1972 Pub. L. 92-603 Pub. L. 92–603, § 123(c)(2), added par. (4).

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(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.

Amended 1983, 1986

1986 Pub. L. 99-272 Pub. L. 99–272, § 12112(b), substituted “shall not include” for “shall, subject to the provisions of subsection (a)(1) of this section, include”.
1983 Pub. L. 98-21 Pub. L. 98–21, § 101(c)(2), added par. (5).

(j) Covered transportation service For purposes of this chapter—

§ 31.3121(j)-1 Covered transportation service.

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(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—

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(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

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(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.

(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, § 102(b)(2), Apr. 20, 1983, 97 Stat. 71]

Amended 1954, 1956, 1958, 1960, 1965, 1969, 1976, 1977, 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 102(b)(2), struck out subsec. (k) which related to exemption of religious, charitable and certain other organizations.
1977 Pub. L. 95-216 Pub. L. 95–216, § 312(b)(2), (f), substituted “(or, if later, as of the earliest date on which it satisfies clause (ii) of this subparagraph)” for “or any subsequent date” in cl. (i) and, in provisions following cl. (ii), inserted “(subject to subparagraph (C))” after “effective”.
1977 Pub. L. 95-216 Pub. L. 95–216, § 312(b)(4), substituted “first day of the calendar quarter” for “date”.
1977 Pub. L. 95-216 Pub. L. 95–216, § 312(g), added cl. (iii).
1977 Pub. L. 95-216 Pub. L. 95–216, § 312(b)(1), added subpar. (C).
1977 Pub. L. 95-216 Pub. L. 95–216, § 312(a)(1), substituted “prior to April 1, 1978,” for “prior to the expiration of 180 days after the date of the enactment of this paragraph,” in subpar. (B), and, in provisions following subpar. (B), substituted “April 1, 1978” for “the 181st day after the date of enactment of this paragraph” and substituted “April 1, 1978,” for “such 181st day”.
1977 Pub. L. 95-216 Pub. L. 95–216, § 312(b)(3), inserted “(except as provided in paragraph (4)(C))” after “services involved” in introductory provisions.
1977 Pub. L. 95-216 Pub. L. 95–216, § 312(a)(2), substituted “prior to April 1, 1978,” for “prior to the expiration of 180 days after the date of the enactment of this paragraph”, “April 1, 1978,” for “the 181st day after such date,” and “prior to that date” for “prior to the first day of the calendar quarter in which such 181st day occurs”.
1977 Pub. L. 95-216 Pub. L. 95–216, § 312(a)(3), (d), amended par. (8) first by substituting “prior to April 1, 1978,” for “by the end of the 180-day period following the date of the enactment of this paragraph”, “prior to April 1, 1978” for “within that period”, and “on that date” for “on the 181st day following that date”, and then further amending par. (8) as so amended by dividing the existing provisions into introductory provisions, subpar. (B), and closing provisions, inserting subpars. (A) and (C), substituting “by March 31, 1978” for “prior to April 1, 1978”, “by that date” for “prior to April 1, 1978”, and “on April 1, 1978” for “on that date” in subpar. (B) as so redesignated, and, in closing provisions, inserting “, or with respect to service constituting employment by reason of such request,” after “in which the date of such filing or constructive filing occurs”.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1903(a)(3)(E), redesignated subpar. (G) as (F). Former subpars. (F) and (H), which related to the right of an organization to request before 1960 to have a certificate effective where such certificate was filed after 1955 but prior to the enactment of this subparagraph and the right of an organization to amend a certificate filed before 1966 to make such certificate effective for an earlier date than had been originally established, respectively, were struck out.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” wherever appearing.
1976 Pub. L. 94-563 Pub. L. 94–563, § 1(c), added pars. (4) to (8).
1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” wherever appearing.
1969 Pub. L. 91-172 Pub. L. 91–172, § 943(c)(1)–(3), inserted “or pay tax” after “tax return”.
1965 Pub. L. 89-97 Pub. L. 89–97, § 316(a)(1), substituted “such date may not be earlier than the first day of the twentieth” for “, in the case of a certificate filed prior to January 1, 1960, such date may not be earlier than January 1, 1956, and in the case of a certificate filed after 1959, such date may not be earlier than the first day of the fourth”.
1965 Pub. L. 89-97 Pub. L. 89–97, § 316(b), added subpar. (H).
1960 Pub. L. 86-778 Pub. L. 86–778, § 105(a)(1), (2), struck out “and that at least two-thirds of its employees concur in the filing of the certificate” after “extended to service performed by its employees”, and substituted “of each employee (if any) who concurs” for “of each employee who concurs”.
1960 Pub. L. 86-778 Pub. L. 86–778, § 105(a)(3), substituted “in either group, or may file a separate certificate pursuant to such subparagraph with respect to the employees in each group” for “in one of the groups if at least two-thirds of the employees in such group concur in the filing of the certificate. The organization may also file such a certificate with respect to the employees in the other group if at least two-thirds of the employees in such other group concur in the filing of such certificate.”
1958 Pub. L. 85-840 Pub. L. 85–840, § 405(a), permitted amendment of the list at any time prior to the expiration of the twenty-fourth month following the calendar quarter in which the certificate is filed, allowed an organization to provide that the certificate shall be in effect for the period beginning with the first day of any calendar quarter preceding the calendar quarter in which the certificate is filed, except that, in the case of a certificate filed prior to Jan. 1, 1960, such date may not be earlier than Jan. 1, 1956, and in the case of a certificate filed after 1959, such date may not be earlier than the first day of the fourth calendar quarter preceding the quarter in which such certificate is first made the certificate effective in the case of services performed by an employee whose name appears on a supplemental list only with respect to service performed by the employee for the period beginning with the first day of the calendar quarter in which the supplemental list is filed, required organizations described in subpar. (A) which employ both individuals who are in positions covered by a pension, annuity, retirement, or similar fund or system established by a State or political subdivision thereof and individuals who are not in such positions, to divide their employees into two separate groups, authorized the filing of requests by organizations which filed certificates after 1955 but prior to Aug. 28, 1958, to have such certificates effective, with respect to services of certain individuals, for the period beginning with the first day of any calendar quarter preceding the first calendar quarter for which they are effective and following the last calendar quarter of 1955, and provided for the due date and payment of tax for certain calendar quarters and for the expiration of the statutory period of assessment.
1956 Act Aug. 1, 1956, ch. 836, § 201(k), (l), inserted “or at any time prior to January 1, 1959, whichever is the later” after “the certificate is in effect”, and substituted “the first day of the calendar quarter in which such certificate is filed or the first day of the succeeding calendar quarter, as may be specified in the certificate,” for “the first day following the close of the calendar quarter in which such certificate is filed,”.
1954 Act Sept. 1, 1954, §§ 205(b), 207, substituted “(b)(8)(B)” for “(b)(9)(B)” and provided that the list accompanying any certificate filed by a nonprofit organization with respect to its lay employees may be amended only within a period of two years after the certificate takes effect and provided that a supplemental list filed after the first month following the first calendar quarter for which the certificate is in effect shall be in effect only as to those services performed by an individual on the list which are performed by him after the calendar quarter in which the supplemental list is filed.

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(l) Agreements entered into by American employers with respect to foreign affiliates

§ 31.3121(l)-1 Agreements entered into by domestic corporations with respect to foreign subsidiaries.§ 36.3121(l)-0 Introduction.§ 36.3121(l)(1)-1 Agreements entered into by domestic corporations with respect to foreign subsidiaries.§ 36.3121(l)(1)-2 Amendment of agreement.§ 36.3121(l)(1)-3 Effect of agreement.§ 36.3121(l)(2)-1 Effective period of agreement.§ 36.3121(l)(3)-1 Termination of agreement by domestic corporation or by reason of change in stock ownership.§ 36.3121(l)(4)-1 Termination of agreement by Commissioner.§ 36.3121(l)(5)-1 Effect of termination.§ 36.3121(l)(7)-1 Overpayments and underpayments.§ 36.3121(l)(8)-1 Definition of foreign subsidiary.§ 36.3121(l)(9)-1 Domestic corporation as separate entity.§ 36.3121(l)(10)-1 Requirements in respect of liability under agreement.§ 36.3121(l)(10)-2 Identification.§ 36.3121(l)(10)-3 Returns.§ 36.3121(l)(10)-4 Payment of amounts equivalent to tax.

Amended 1954, 1976, 1983, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(a)(4), redesignated pars. (6) to (10) as (4) to (8), respectively.
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(a)(1), substituted “Agreements entered into by American employers with respect to foreign affiliates” for “Agreements entered into by domestic corporations with respect to foreign subsidiaries” in heading.
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(1), substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, and “foreign entities” for “foreign corporations”.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(a), struck out “or his delegate” after “Secretary” wherever appearing.
1954 Act Sept. 1, 1954, § 209, added subsec. (l).

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(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—

Amended 1976, 1983, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(b)(3), substituted “paragraph (6)” for “paragraph (8)” in introductory provisions.
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(a)(1), substituted “affiliates” for “subsidiaries” in par. (1) heading, and in first sentence of provisions preceding subpar. (A), substituted “at the American employer’s request” for “at the request of any domestic corporation”, “any American employer (as defined in subsection (h)) who” for “any such corporation which”, “such manner and form” for “such form and manner”, and “affiliates” for “subsidiaries” after “such employer’s foreign”, and inserted “or residents” after “citizens”.
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(1), substituted “American employer” for “domestic corporation”, “affiliate” for “subsidiary” and “citizens or residents” for “citizens” wherever appearing in second and third sentences of provisions preceding subpar. (A) and substituted “American employer” for “domestic corporation” in subpars. (A) and (B).
1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.

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(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).

Amended 1976, 1983, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(a)(1), inserted at end “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).”
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(1), substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, “affiliate” for “subsidiary”, “affiliates” for “subsidiaries”, “foreign entity” for “foreign corporation”, “foreign entities” for “foreign corporations”, and “citizens or residents” for “citizens”.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1903(a)(3)(F), struck out “, but in no case prior to January 1, 1955” after “specified in the agreement”.

(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.

Amended 1958, 1983, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(a)(2), (3), added par. (3) and struck out former par. (3) relating to termination of period by American employer.
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(1), substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, “affiliate” for “subsidiary”, “affiliates” for “subsidiaries”, “foreign entity” for “foreign corporation”, “foreign entities” for “foreign corporations”, and “citizens or residents” for “citizens”.
1958 Pub. L. 85-866 Pub. L. 85–866 substituted “by” for “be” in heading.

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(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—

Amended 1976, 1983, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(a)(2), (4), redesignated par. (6) as (4) and struck out former par. (4) relating to termination of period by Secretary.
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(1), substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, “affiliate” for “subsidiary”, “affiliates” for “subsidiaries”, “foreign entity” for “foreign corporation”, “foreign entities” for “foreign corporations”, and “citizens or residents” for “citizens”.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(a), struck out “or his delegate” after “Secretary” wherever appearing.

(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

Amended 1976, 1983, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(a)(2), (4), redesignated par. (7) as (5) and struck out former par. (5) relating to no renewal of agreement.
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(1), substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, “affiliate” for “subsidiary”, “affiliates” for “subsidiaries”, “foreign entity” for “foreign corporation”, “foreign entities” for “foreign corporations”, and “citizens or residents” for “citizens”.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(a), struck out “or his delegate” after “Secretary” wherever appearing.

(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.

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(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—

Amended 1956, 1976, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(a)(4), redesignated pars. (6) to (10) as (4) to (8), respectively.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(a), struck out “or his delegate” after “Secretary” wherever appearing.
1956 Act Aug. 1, 1956, ch. 836, § 103(j), inserted reference to the Federal Disability Insurance Trust Fund.

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(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.

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(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.

Amended 1976, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(a)(4), redesignated pars. (6) to (10) as (4) to (8), respectively.
1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(a), struck out “or his delegate” after “Secretary” wherever appearing.

(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.

Amended 1956, 1983, 1989

1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(a)(4), redesignated pars. (6) to (10) as (4) to (8), respectively.
1983 Pub. L. 98-21 Pub. L. 98–21, § 321(a)(2), amended par. (8) generally, substituting provision defining a foreign affiliate for provision defining a foreign subsidiary of a domestic corporation which, for the purposes of this subsection and section 210(a) of the Social Security Act, had been defined as a foreign corporation not less than 20 percent of the voting stock of which was owned by such domestic corporation, or a foreign corporation more than 50 percent of the voting stock of which was owned by the foreign corporation described above.
1956 Act Aug. 1, 1956, ch. 836, § 201(j), substituted “not less than 20 percent” for “more than 50 percent”.

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(m) Service in the uniformed services For purposes of this chapter—

Amended 1956

1956 Act Aug. 1, 1956, ch. 837, § 411(a), added subsecs. (m) and (n).

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(1) Inclusion of service The term “employment” shall, notwithstanding the provisions of subsection (b) of this section, include—

Amended 1976, 1987

1987 Pub. L. 100-203 Pub. L. 100–203, § 9001(b)(1), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The term ‘employment’ shall, notwithstanding the provisions of subsection (b) of this section, include 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.”
1976 Pub. L. 94-455 Pub. L. 94–455, § 1903(a)(3)(G), struck out “after December 1956” after “include service performed”.

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(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.

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(i)(3), substituted “paragraph (21) of section 101 of title 38, United States Code” for “section 102 of the Servicemen’s and Veterans’ Survivor Benefits Act” and “paragraph (22) of such section” for “such section”.

(3) Inactive duty training The term “inactive duty training” means “inactive duty training” as described in paragraph (23) of such section 101.

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(i)(4), substituted “paragraph (23) of such section 101” for “such section 102”.

(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 [OLRC note: See Change of Name note below.] of the Public Health Service, and any person serving in the Army or Air Force under call or conscription. The term includes—

Amended 1956, 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(i)(5), in provision preceding par. (1) substituted “a reserve component as defined in section 101(27) of title 38, United States Code” for “a reserve component of a uniformed service as defined in section 102(3) of the Servicemen’s and Veterans’ Survivor Benefits Act”, and inserted “, the National Oceanic and Atmospheric Administration Corps,”.
1956 Act Aug. 1, 1956, ch. 837, § 411(a), added subsecs. (m) and (n).

(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—

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(i)(5)(C), substituted “military, naval, or air” for “military or naval” in two places.

(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;

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2663(i)(5)(D), substituted “Military Selective Service Act” for “Universal Military Training and Service Act”.

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.

§ 31.3121(o)-1 Crew leader.

Amended 1956

1956 Act Aug. 1, 1956, ch. 836, § 201(h)(2), added subsec. (o).

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(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.

Amended 1961

1961 Pub. L. 87-293 Pub. L. 87–293, § 202(a)(2), added subsec. (p).

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(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.

§ 31.3121(q)-1 Tips included for employee taxes.

Amended 1965, 1987

1987 Pub. L. 100-203 Pub. L. 100–203, § 9006(a), in heading substituted “both employee and employer taxes” for “employee taxes”, and in text struck out “other than for purposes of the taxes imposed by section 3111” after “of this chapter”, substituted “remuneration for such employment (and deemed to have been paid by the employer for purposes of subsections (a) and (b) of section 3111)” for “remuneration for employment”, and inserted before period at end “; 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”.
1965 Pub. L. 89-97 Pub. L. 89–97, § 313(c)(4), added subsec. (q).

Cases: United States v. Fior D'Italia, Inc., 536 U.S. 238 (2002); The Bubble Room, Inc. v. United States, 159 F.3d 553 (Fed. Cir. 1999)

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(r) Election of coverage by religious orders

§ 31.3121(r)-1 Election of coverage by religious orders.

Amended 1972

1972 Pub. L. 92-603 Pub. L. 92–603, § 123(b), added subsec. (r).

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(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.

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(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:

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 102(b)(3)(A), substituted “subsection (b)(8)” and “section 210(a)(8)” for “subsection (b)(8)(A)” and “section 210(a)(8)(A)”, respectively, in provisions preceding cl. (i).

(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.

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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, § 102(b)(3)(B), Apr. 20, 1983, 97 Stat. 71]

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 102(b)(3)(B), struck out par. (4) which related to coordination with coverage of lay employees.

(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.

Textual readingALL OF= each corporation treated as paying only own disbursements

“two or more related corporations concurrently employ the same individual”

“compensate such individual through a common paymaster which is one of such corporations”

§ 31.3121(s)-1 Concurrent employment by related corporations with common paymaster.

Amended 1977

1977 Pub. L. 95-216 Pub. L. 95–216, § 314(a), added subsec. (s).

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[(t) Repealed. Pub. L. 100–203, title IX, § 9006(b)(2), Dec. 22, 1987, 101 Stat. 1330–289]

Amended 1977, 1987

1987 Pub. L. 100-203 Pub. L. 100–203, § 9006(b)(2), struck out subsec. (t) which related to special rule for determining wages subject to employer tax in case of certain employers whose employees receive income from tips.
1977 Pub. L. 95-216 Pub. L. 95–216, § 315(a), added subsec. (t).

(u) Application of hospital insurance tax to Federal, State, and local employment

Amended 1982, 1986

1986 Pub. L. 99-272 Pub. L. 99–272, § 13205(a)(1), amended subsec. (u) generally, substantially expanding and revising its provisions by extending the application of hospital insurance tax to State and local employment.
1982 Pub. L. 97-248 Pub. L. 97–248 added subsec. (u).

(1) Federal employment For purposes of the taxes imposed by sections 3101(b) and 3111(b), subsection (b) shall be applied without regard to paragraph (5) thereof.

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 101(b)(2), substituted “sections 3101(b) and 3111(b), subsection (b) shall be applied without regard to paragraph (5) thereof” for “sections 3101(b) and 3111(b)—
“(A) paragraph (6) of subsection (b) shall be applied without regard to subparagraphs (A), (B), and (C)(i), (ii), and (vi) thereof, and
“(B) paragraph (5) of subsection (b) (and the provisions of law referred to therein) shall not apply”.

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(2) State and local employment For purposes of the taxes imposed by sections 3101(b) and 3111(b)—

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(A) In general Except as provided in subparagraphs (B) and (C), subsection (b) shall be applied without regard to paragraph (7) thereof.

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(B) Exception for certain services Service shall not be treated as employment by reason of subparagraph (A) if—

Textual readingANY OF= service not treated as employment by reason of subparagraph (A)

(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

Textual readingALL OF= not employment by reason of subparagraph (A)

“by an election official or election worker”

“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”

Amended 1986, 1994

1994 Pub. L. 103-296 Pub. L. 103–296, § 303(b)(2), substituted “$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” for “$100”.
1986 Pub. L. 99-514 Pub. L. 99–514, § 1895(b)(18)(A), added subcl. (V).

(VI) by an individual in a position described in section 1402(c)(2)(E).

Amended 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 1018(r)(2)(A), added subcl. (VI).

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.

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(C) Exception for current employment which continues Service performed for an employer shall not be treated as employment by reason of subparagraph (A) if—

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(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.

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(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—

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(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

§ 31.3121(v)(2)-1 Treatment of amounts deferred under certain nonqualified deferred compensation plans.§ 31.3121(v)(2)-2 Effective dates and transition rules.

Amended 1983

1983 Pub. L. 98-21 Pub. L. 98–21, § 324(a)(1), added subsec. (v).

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(1) Certain employer contributions treated as wages Nothing in any paragraph of subsection (a) (other than paragraph (1)) shall exclude from the term “wages”—

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(A) any employer contribution under a qualified cash or deferred arrangement (as defined in section 401(k)) to the extent not included in gross income by reason of section 402(e)(3) or consisting of designated Roth contributions (as defined in section 402A(c)), or

Amended 1992, 2007

2007 Pub. L. 110-172 Pub. L. 110–172, which directed amendment of subpar. (A) by inserting “or consisting of designated Roth contributions (as defined in section 402A(c))” before comma at end, was executed by making the insertion before “, or”, to reflect the probable intent of Congress.
1992 Pub. L. 102-318 Pub. L. 102–318 substituted “402(e)(3)” for “402(a)(8)”.

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(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).

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2661(o)(3), substituted “section 414(h)(2) where the pick up referred to in such section is pursuant to a salary reduction agreement (whether evidenced by a written instrument or otherwise)” for “section 414(h)(2)”.

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(2) Treatment of certain nonqualified deferred compensation plans

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(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—

Amended 1984, 2004

2004 Pub. L. 108-357 Pub. L. 108–357, § 802(c)(1), inserted “or to any specified stock compensation (as defined in section 4985) on which tax is imposed by section 4985” before period at end.
1984 Pub. L. 98-369 Pub. L. 98–369, § 67(c), inserted provision that the preceding sentence shall not apply to any excess parachute payment (as defined in section 2801G(b)).

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(i) when the services are performed, or

(ii) when there is no substantial risk of forfeiture of the rights to such amount.

Amended 1986

1986 Pub. L. 99-514 Pub. L. 99–514, § 1899A(38), substituted “forfeiture” for “forefeiture”.

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.

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(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—

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(A) any plan to which section 83, 402(b), 403(c), 457(a), or 457(f)(1) applies,

Amended 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 1011(e)(8), substituted “457(f)(1)” for “457(e)(1)”.

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(B) any annuity contract described in section 403(b), and

Amended 1986, 1988

1988 Pub. L. 100-647 Pub. L. 100–647, § 1018(u)(35), substituted “Savings” for “Saving”.
1986 Pub. L. 99-514 Pub. L. 99–514, § 1147(b), added subpar. (C).

(w) Exemption of churches and qualified church-controlled organizations

Amended 1984

1984 Pub. L. 98-369 Pub. L. 98–369, § 2603(b), added subsec. (w).

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(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.

Amended 1986

1986 Pub. L. 99-514 Pub. L. 99–514, § 1899A(39), substituted “this chapter” for “chapter 21 of this Code” in first sentence.

(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.

Amended 1986

1986 Pub. L. 99-514 Pub. L. 99–514, § 1882(c), substituted last three sentences for former last two sentences which read as follows: “The election may not be revoked by the church or organization, but shall be permanently 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. Such revocation shall apply retroactively to the beginning of the 2-year period for which the information was not furnished.”
1986 Pub. L. 99-514 Pub. L. 99–514, § 1899A(40), substituted “July 18, 1984” for “the date of the enactment of this subsection” in first sentence.

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(3) Definitions

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(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.

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(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—

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(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.

Amended 1988, 1989, 1990, 1993, 1994

1994 Pub. L. 103-387 Pub. L. 103–387, § 2(a)(1)(B), added subsec. (x).
1993 Pub. L. 103-66 Pub. L. 103–66, § 13207(a)(2), struck out subsec. (x) which defined parameters of the applicable contribution base for purposes of this chapter.
1990 Pub. L. 101-508 Pub. L. 101–508, § 11331(a)(2), added subsec. (x).
1989 Pub. L. 101-140 Pub. L. 101–140 amended this section to read as if amendments by Pub. L. 100–647, § 1011B(a)(22)(A), had not been enacted, see 1988 Amendment note below.
1988 Pub. L. 100-647 Pub. L. 100–647, § 1011B(a)(22)(A), added subsec. (x) relating to benefits provided under certain employee benefit plans.

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(y) Service in the employ of international organizations by certain transferred Federal employees

Amended 1994

1994 Pub. L. 103-296 Pub. L. 103–296, § 319(a)(1), added subsec. (y).

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(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.

(z) Treatment of certain foreign persons as American employers

Amended 2008

2008 Pub. L. 110-245 Pub. L. 110–245, § 302(a), added subsec. (z).

(1) In general If any employee of a foreign person is performing services in connection with a contract between the United States Government (or any instrumentality thereof) and any member of any domestically controlled group of entities which includes such foreign person, such foreign person shall be treated for purposes of this chapter as an American employer with respect to such services performed by such employee.

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(2) Domestically controlled group of entities For purposes of this subsection—

(A) In general The term “domestically controlled group of entities” means a controlled group of entities the common parent of which is a domestic corporation.

Textual readingALL OF= a domestically controlled group of entities

“a controlled group of entities”

“the common parent of which is a domestic corporation”

(B) Controlled group of entities The term “controlled group of entities” means a controlled group of corporations as defined in section 1563(a)(1), except that—

(i) “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears therein, and

(ii) the determination shall be made without regard to subsections (a)(4) and (b)(2) of section 1563.

A partnership or any other entity (other than a corporation) shall be treated as a member of a controlled group of entities if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this sentence).

(3) Liability of common parent In the case of a foreign person who is a member of any domestically controlled group of entities, the common parent of such group shall be jointly and severally liable for any tax under this chapter for which such foreign person is liable by reason of this subsection, and for any penalty imposed on such person by this title with respect to any failure to pay such tax or to file any return or statement with respect to such tax or wages subject to such tax. No deduction shall be allowed under this title for any liability imposed by the preceding sentence.

(4) Provisions preventing double taxation

(A) Agreements Paragraph (1) shall not apply to any services which are covered by an agreement under subsection (l).

(B) Equivalent foreign taxation Paragraph (1) shall not apply to any services if the employer establishes to the satisfaction of the Secretary that the remuneration paid by such employer for such services is subject to a tax imposed by a foreign country which is substantially equivalent to the taxes imposed by this chapter.

Textual readingALL OF= paragraph (1) does not apply

“the employer establishes to the satisfaction of the Secretary that the remuneration paid by such employer for such services is subject to a tax imposed by a foreign country”

“which is substantially equivalent to the taxes imposed by this chapter”

“Substantially” implies facts and circumstances. No regulation cites this provision (eCFR, Oct 19, 2026)

(5) Cross reference For relief from taxes in cases covered by certain international agreements, see sections 3101(c) and 3111(c).