§ 3401 Definitions

OLRC 119-134 · eCFR 2026-10-19 · 31 regs · 34 amending Acts · cited by 20 sections

Enacted 1954 · Act Aug. 16, 1954, ch. 736 Amended · 34 Acts · From 1939 Code § 1621

1954195519611962196419651966197219741976197819801981198319841986198819891990199619982001200320042005200820172018(a) Wages(b) Payroll period(c) Employee(d) Employer[(e) Repealed. Pub. L. 115–97, title I, § 11041(c)(2)(A), Dec. 22, 2017, 131 Stat. 2082](f) Tips(g) Crew leader rules to apply(h) Differential wage payments to active duty members of the uniformed services(i) Qualified stock for which an election is in effect under section 83(i)
Connections Cited by 20 · Cites 19
+8 more
§ 3401 Definitions
+7 more

Cases: Central Illinois Public Service Co. v. United States, 435 U.S. 21 (1978); Stubbs, Overbeck & Associates v. United States, 445 F.2d 1142 (5th Cir. 1971)

Forms: Form 1042S

Final rules 4

    (a) Wages For purposes of this chapter, the term “wages” means all remuneration (other than fees paid to a public official) for services performed by an employee for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash; except that such term shall not include remuneration paid—

    § 31.3401(a)-1 Wages.§ 31.3401(a)-1T Question and answer relating to the definition of wages in section 3401(a) (Temporary).§ 31.3401(a)-2 Exclusions from wages.§ 31.3401(a)-3 Amounts deemed wages under voluntary withholding agreements.§ 31.3401(a)-4 Reimbursements and other expense allowance amounts.§ 31.3401(a)(1)-1 Remuneration of members of the Armed Forces of the United States for active service in combat zone or while hospitalized as a result of such service.§ 31.3401(a)(2)-1 Agricultural labor.§ 31.3401(a)(3)-1 Remuneration for domestic service.§ 31.3401(a)(4)-1 Cash remuneration for service not in the course of employer's trade or business.§ 31.3401(a)(5)-1 Remuneration for services for foreign government or international organization.§ 31.3401(a)(6)-1 Remuneration for services of nonresident alien individuals.§ 31.3401(a)(6)-1A Remuneration for services of certain nonresident alien individuals paid before January 1, 1967.§ 31.3401(a)(7)-1 Remuneration paid before January 1, 1967, for services performed by nonresident alien individuals who are residents of a contiguous country and who enter and leave the United States at frequent intervals.§ 31.3401(a)(8)(A)-1 Remuneration for services performed outside the United States by citizens of the United States.§ 31.3401(a)(8)(B)-1 Remuneration for services performed in possession of the United States (other than Puerto Rico) by citizen of the United States.§ 31.3401(a)(8)(C)-1 Remuneration for services performed in Puerto Rico by citizen of the United States.§ 31.3401(a)(9)-1 Remuneration for services performed by a minister of a church or a member of a religious order.§ 31.3401(a)(10)-1 Remuneration for services in delivery or distribution of newspapers, shopping news, or magazines.§ 31.3401(a)(11)-1 Remuneration other than in cash for service not in the course of employer's trade or business.§ 31.3401(a)(12)-1 Payments from or to certain tax-exempt trusts, or under or to certain annuity plans or bond purchase plans, or to individual retirement plans.§ 31.3401(a)(13)-1 Remuneration for services performed by Peace Corps volunteers.§ 31.3401(a)(14)-1 Group-term life insurance.§ 31.3401(a)(15)-1 Moving expenses.§ 31.3401(a)(16)-1 Tips.§ 31.3401(a)(17)-1 Remuneration for services performed on a boat engaged in catching fish.§ 31.3401(a)(18)-1 Payments or benefits under a qualified educational assistance program.§ 31.3401(a)(19)-1 Reimbursements under a self-insured medical reimbursement plan.
    Amended 1955, 1984, 2004, 2018
    • 2018 Pub. L. 115-141 Pub. L. 115–141 made numerous technical amendments to pars. and subpars. throughout subsec. (a), resulting in the appearance of a comma or “, or” at end.
    • 2004 Pub. L. 108-357 Pub. L. 108–357, § 885(b)(2), inserted concluding provisions.
    • 1984 Pub. L. 98-369 Pub. L. 98–369, § 531(d)(4)(A), inserted “(including benefits)” in introductory provisions.
    • 1955 Act Aug. 9, 1955, excluded from definition of wages, remuneration paid for services performed in a possession of the United States by a United States citizen if the employer is required by the law of the possession to withhold income tax on the remuneration.
    Cited by 57

      (1) for active service performed in a month for which such employee is entitled to the benefits of section 112 (relating to certain combat zone compensation of members of the Armed Forces of the United States) to the extent remuneration for such service is excludable from gross income under such section,

      Amended 1972, 1996
      • 1996 Pub. L. 104-188 Pub. L. 104–188, § 1704(t)(4)(C), substituted “combat zone compensation” for “combat pay”.
      • 1996 Pub. L. 104-117 Pub. L. 104–117 inserted before semicolon “to the extent remuneration for such service is excludable from gross income under such section”.
      • 1972 Pub. L. 92-279 Pub. L. 92–279 struck out “as a member of the Armed Forces of the United States” after “active service”, substituted “employee” for “member”, and parenthetical text “(relating to certain combat pay of members of the Armed Forces of the United States)”.

      (2) for agricultural labor (as defined in section 3121(g)) unless the remuneration paid for such labor is wages (as defined in section 3121(a)),

      Amended 1989
      • 1989 Pub. L. 101-239 Pub. L. 101–239, § 7631(a), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “for agricultural labor (as defined in section 3121(g)); or”.
      Cited by 2

        (3) for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority,

        Cited by 2

          (4) for service not in the course of the employer’s trade or business performed in any calendar quarter by an employee, unless the cash remuneration paid for such service is $50 or more and such service is performed by an individual who is regularly employed by such employer to perform such service. For purposes of this paragraph, an individual shall be deemed to be regularly employed by an employer during a calendar quarter only if—

          (A) on each of some 24 days during such quarter such individual performs for such employer for some portion of the day service not in the course of the employer’s trade or business, or

          Cited by 1

            (B) such individual was regularly employed (as determined under subparagraph (A)) by such employer in the performance of such service during the preceding calendar quarter,

            (5) for services by a citizen or resident of the United States for a foreign government or an international organization,

            Cited by 1

              (6) for such services, performed by a nonresident alien individual, as may be designated by regulations prescribed by the Secretary,

              Amended 1961, 1966, 1976
              • 1976 Pub. L. 94-455 Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
              • 1966 Pub. L. 89-809 Pub. L. 89–809, § 103(k), struck out par. (6) dealing with services performed by nonresident alien individuals other than residents of contiguous countries who enter and leave the United States at frequent intervals, residents of Puerto Rico if such services are performed as an employee of the United States or any agency thereof, or individuals temporarily present in the United States as nonimmigrants under certain conditions, redesignated par. (7) as (6), and in par (6) as so redesignated, struck out “who is a resident of a contiguous country and who enters and leaves the United States at frequent intervals” after “nonresident alien individual”.
              • 1961 Pub. L. 87-256 Pub. L. 87–256 added subpar. (C).
              Cited by 5

                [(7) Repealed. Pub. L. 89–809, title I, § 103(k), Nov. 13, 1966, 80 Stat. 1554]

                Amended 1966
                • 1966 Pub. L. 89-809 Pub. L. 89–809, § 103(k), struck out par. (6) dealing with services performed by nonresident alien individuals other than residents of contiguous countries who enter and leave the United States at frequent intervals, residents of Puerto Rico if such services are performed as an employee of the United States or any agency thereof, or individuals temporarily present in the United States as nonimmigrants under certain conditions, redesignated par. (7) as (6), and in par (6) as so redesignated, struck out “who is a resident of a contiguous country and who enters and leaves the United States at frequent intervals” after “nonresident alien individual”.

                (8)

                Cited by 4

                  (A) for services for an employer (other than the United States or any agency thereof)—

                  (i) performed by a citizen of the United States if, at the time of the payment of such remuneration, it is reasonable to believe that such remuneration will be excluded from gross income under section 911, or

                  (ii) performed in a foreign country or in a possession of the United States by such a citizen if, at the time of the payment of such remuneration, the employer is required by the law of any foreign country or possession of the United States to withhold income tax upon such remuneration,

                  (B) for services for an employer (other than the United States or any agency thereof) performed by a citizen of the United States within a possession of the United States (other than Puerto Rico), if it is reasonable to believe that at least 80 percent of the remuneration to be paid to the employee by such employer during the calendar year will be for such services,

                  Cited by 3

                    (C) for services for an employer (other than the United States or any agency thereof) performed by a citizen of the United States within Puerto Rico, if it is reasonable to believe that during the entire calendar year the employee will be a bona fide resident of Puerto Rico, or

                    Cited by 4

                      (D) for services for the United States (or any agency thereof) performed by a citizen of the United States within a possession of the United States to the extent the United States (or such agency) withholds taxes on such remuneration pursuant to an agreement with such possession,

                      Amended 1986

                      (9) for services 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,

                      (10)

                      (A) for services 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, or

                      (B) for services 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 services, or is entitled to be credited with the unsold newspapers or magazines turned back,

                      (11) for services not in the course of the employer’s trade or business, to the extent paid in any medium other than cash,

                      Cited by 1

                        (12) to, or on behalf of, an employee or his beneficiary—

                        Amended 1984
                        • 1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(38), 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 subpar. (D) as (C).
                        Cited by 2

                          (A) from or to a trust described in section 401(a) which is exempt from tax under section 501(a) at the time of such payment unless such payment is made to an employee of the trust as remuneration for services rendered as such employee and not as a beneficiary of the trust,

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

                          Amended 1962
                          • 1962 Pub. L. 87-792 Pub. L. 87–792 substituted “is a plan described in section 403(a)” for “meets the requirements of section 401(a)(3), (4), (5), and (6)”, in subpar. (B), and added subpar. (C).

                          (C) for a payment described in section 402(h)(1) and (2) if, at the time of such payment, it is reasonable to believe that the employee will be entitled to an exclusion under such section for payment,

                          Amended 1962, 1988
                          • 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011(f)(9), substituted “section 402(h)(1) and (2)” for “section 219” and “an exclusion” for “a deduction”.
                          • 1962 Pub. L. 87-792 Pub. L. 87–792 substituted “is a plan described in section 403(a)” for “meets the requirements of section 401(a)(3), (4), (5), and (6)”, in subpar. (B), and added subpar. (C).

                          (D) under an arrangement to which section 408(p) applies, or

                          Amended 1974, 1976, 1981, 1983, 1996
                          • 1996 Pub. L. 104-188 Pub. L. 104–188, § 1421(b)(8)(D), added subpar. (D).
                          • 1983 Pub. L. 97-448 Pub. L. 97–448 substituted “section 219” for “section 219(a)”.
                          • 1981 Pub. L. 97-34 Pub. L. 97–34, § 311(h)(6), substituted “section 219(a)” for “section 219(a) or 220(a)”.
                          • 1976 Pub. L. 94-455 Pub. L. 94–455, § 1501(b)(7), inserted “or 220(a)” after “section 219(a)”.
                          • 1974 Pub. L. 93-406 Pub. L. 93–406 added subpar. (D).

                          (E) under or to an eligible deferred compensation plan which, at the time of such payment, is a plan described in section 457(b) which is maintained by an eligible employer described in section 457(e)(1)(A),

                          Amended 2001

                          (13) pursuant to any provision of law other than section 5(c) or 6(1) of the Peace Corps Act, for service performed as a volunteer or volunteer leader within the meaning of such Act,

                          Amended 1961

                          (14) in the form of group-term life insurance on the life of an employee,

                          Amended 1964
                          Cited by 1

                            (15) 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)(iii), inserted “(determined without regard to section 274(n))” after “section 217”.
                            • 1964 Pub. L. 88-272 Pub. L. 88–272, § 213(c), added par. (15).
                            Cited by 1

                              (16)

                              Amended 1965
                              • 1965 Pub. L. 89-97 Pub. L. 89–97, § 313(d)(2), added par. (16).

                              (A) as tips in any medium other than cash, [OLRC note: So in original. Probably should be followed by “or”.]

                              Cited by 1

                                (B) as cash tips to 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

                                  (17) for service described in section 3121(b)(20),

                                  Amended 1976
                                  • 1976 Pub. L. 94-455 Pub. L. 94–455, § 1207(e)(1)(C), added par. (17).

                                  (18) for 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, 1980, 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, § 124(e)(2)(A), substituted “section 127 or 129” for “section 127”.
                                  • 1981 Pub. L. 97-34 Pub. L. 97–34, § 112(b)(5), redesignated par. (19) as (18). Former par. (18), relating to 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 was reasonable to believe that a corresponding deduction was allowable under section 913 (relating to deduction for certain expenses of living abroad), was struck out.
                                  • 1980 Pub. L. 96-222 Pub. L. 96–222 redesignated par. (18), added by Pub. L. 95–600, as (19), in par. (19) as so redesignated, substituted “section 127; or” for “section 124.”, and added par. (20).
                                  • 1978 Pub. L. 95-615 Pub. L. 95–615 added par. (18) relating to payments or benefits excludable from income under section 124.
                                  • 1978 Pub. L. 95-600 Pub. L. 95–600 added par. (18) relating to remuneration for which a corresponding deduction is allowable under section 913.

                                  (19) for 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 1980, 1981, 1988, 1998, 2004
                                  • 2004 Pub. L. 108-357 Pub. L. 108–357, § 320(b)(4), inserted “108(f)(4),” after “74(c),”.
                                  • 1998 Pub. L. 105-206 Pub. L. 105–206 inserted “for” after par. designation.
                                  • 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011B(a)(33), redesignated par. (20) as (19) and struck out former par. (19) which excluded medical care reimbursement made to or for benefit of employee under self-insured medical reimbursement plan.
                                  • 1981 Pub. L. 97-34 Pub. L. 97–34, § 112(b)(5), redesignated par. (20) as (19). Former par. (19) redesignated (18).
                                  • 1980 Pub. L. 96-222 Pub. L. 96–222 redesignated par. (18), added by Pub. L. 95–600, as (19), in par. (19) as so redesignated, substituted “section 127; or” for “section 124.”, and added par. (20).
                                  Cited by 1

                                    (20) for any medical care reimbursement made to or for the benefit of an employee under a self-insured medical reimbursement plan (within the meaning of section 105(h)(6)),

                                    Amended 1980, 1981, 1984, 1986, 1988, 1990
                                    • 1990 Pub. L. 101-508 Pub. L. 101–508 added par. (20).
                                    • 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011B(a)(33), redesignated par. (20) as (19) and struck out former par. (19) which excluded medical care reimbursement made to or for benefit of employee under self-insured medical reimbursement plan.
                                    • 1986 Pub. L. 99-514 Pub. L. 99–514, § 122(e)(4), inserted reference to section 74(c).
                                    • 1984 Pub. L. 98-369 Pub. L. 98–369, § 531(d)(4)(B), added par. (20).
                                    • 1981 Pub. L. 97-34 Pub. L. 97–34, § 112(b)(5), redesignated par. (20) as (19). Former par. (19) redesignated (18).
                                    • 1980 Pub. L. 96-222 Pub. L. 96–222 redesignated par. (18), added by Pub. L. 95–600, as (19), in par. (19) as so redesignated, substituted “section 127; or” for “section 124.”, and added par. (20).

                                    (21) for any payment made to or for the benefit of an employee if at the time of such payment it is reasonable to believe that the employee will be able to exclude such payment from income under section 106(b),

                                    Amended 1996, 1998

                                    (22) any payment made to or for the benefit of an employee if at the time of such payment it is reasonable to believe that the employee will be able to exclude such payment from income under section 106(d), or

                                    Amended 2003

                                    (23) for any benefit or payment which is excludable from the gross income of the employee under section 139B(b).

                                    Amended 2008

                                    The term “wages” includes any amount includible in gross income of an employee under section 409A and payment of such amount shall be treated as having been made in the taxable year in which the amount is so includible.

                                    (b) Payroll period For purposes of this chapter, the term “payroll period” means a period for which a payment of wages is ordinarily made to the employee by his employer, and the term “miscellaneous payroll period” means a payroll period other than a daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual payroll period.

                                    § 31.3401(b)-1 Payroll period.
                                    Cited by 6

                                      (c) Employee For purposes of this chapter, the term “employee” includes an officer, employee, or elected official of the United States, a State, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing. The term “employee” also includes an officer of a corporation.

                                      § 31.3401(c)-1 Employee.
                                      Amended 1976
                                      • 1976 Pub. L. 94-455 Pub. L. 94–455, § 1903(c), struck out “Territory” after “a State”.
                                      Cited by 9

                                        (d) Employer For purposes of this chapter, the term “employer” means the person for whom an individual performs or performed any service, of whatever nature, as the employee of such person, except that—

                                        § 31.3401(d)-1 Employer.

                                        Cases: Cencast Services v. United States, 729 F.3d 1352 (Fed. Cir. 2013)

                                        Cited by 4

                                          (1) if the person for whom the individual performs or performed the services does not have control of the payment of the wages for such services, the term “employer” (except for purposes of subsection (a)) means the person having control of the payment of such wages, and

                                          Cited by 9

                                            (2) in the case of a person paying wages on behalf of a nonresident alien individual, foreign partnership, or foreign corporation, not engaged in trade or business within the United States, the term “employer” (except for purposes of subsection (a)) means such person.

                                            [(e) Repealed. Pub. L. 115–97, title I, § 11041(c)(2)(A), Dec. 22, 2017, 131 Stat. 2082]

                                            Amended 2017
                                            • 2017 Pub. L. 115-97 Pub. L. 115–97, § 11041(c)(2)(A), struck out subsec. (e). Text read as follows: “For purposes of this chapter, the term ‘number of withholding exemptions claimed’ means the number of withholding exemptions claimed in a withholding exemption certificate in effect under section 3402(f), or in effect under the corresponding section of prior law, except that if no such certificate is in effect, the number of withholding exemptions claimed shall be considered to be zero.”

                                            (f) Tips For purposes of subsection (a), the term “wages” includes tips received by an employee in the course of his employment. Such wages 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.

                                            § 31.3401(f)-1 Tips.
                                            Amended 1965
                                            • 1965 Pub. L. 89-97 Pub. L. 89–97, § 313(d)(1), added subsec. (f).

                                            (g) Crew leader rules to apply Rules similar to the rules of section 3121(o) shall apply for purposes of this chapter.

                                            Amended 1988, 1989, 2005
                                            • 2005 Pub. L. 109-135 Pub. L. 109–135 redesignated subsec. (h) as (g).
                                            • 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)(D), had not been enacted, see 1988 Amendment note below.
                                            • 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011B(a)(22)(D), added subsec. (g) relating to benefits provided under certain employee benefit plans.

                                            (h) Differential wage payments to active duty members of the uniformed services

                                            Amended 1989, 2005, 2008

                                            (1) In general For purposes of subsection (a), any differential wage payment shall be treated as a payment of wages by the employer to the employee.

                                            Cited by 1

                                              (2) Differential wage payment For purposes of paragraph (1), the term “differential wage payment” means any payment which—

                                              Cited by 3

                                                (A) is made by an employer to an individual with respect to any period during which the individual is performing service in the uniformed services (as defined in chapter 43 of title 38, United States Code) while on active duty for a period of more than 30 days, and

                                                Cited by 2

                                                  (B) represents all or a portion of the wages the individual would have received from the employer if the individual were performing service for the employer.

                                                  (i) Qualified stock for which an election is in effect under section 83(i) For purposes of subsection (a), qualified stock (as defined in section 83(i)) with respect to which an election is made under section 83(i) shall be treated as wages—

                                                  Amended 2017
                                                  • 2017 Pub. L. 115-97 Pub. L. 115–97, § 13603(b)(1), added subsec. (i).
                                                  Cited by 1

                                                    (1) received on the earliest date described in section 83(i)(1)(B), and

                                                    (2) in an amount equal to the amount included in income under section 83 for the taxable year which includes such date.