(2) State and local employment For purposes of the taxes imposed by sections 3101(b) and 3111(b) — (A) In general Except as provided in subparagraphs (B) and (C), subsection (b) shall be applied without regard to paragraph (7) thereof. (B) Exception for certain services Service shall not be treated as employment by reason of subparagraph (A) if— (i) the service is included under an agreement under section 218 of the Social Security Act, or (ii) the service is performed— (I) by an individual who is employed by a State or political subdivision thereof to relieve him from unemployment, (II) in a hospital, home, or other institution by a patient or inmate thereof as an employee of a State or political subdivision thereof or of the District of Columbia, (III) by an individual, as an employee of a State or political subdivision thereof or of the District of Columbia, serving on a temporary basis in case of fire, storm, snow, earthquake, flood or other similar emergency, (IV) by any individual as an employee included under section 5351(2) of title 5 , United States Code (relating to certain interns, student nurses, and other student employees of hospitals of the District of Columbia Government), other than as a medical or dental intern or a medical or dental resident in training, (V) by an election official or election worker if the remuneration paid in a calendar year for such service is less than $1,000 with respect to service performed during any calendar year commencing on or after January 1, 1995 , ending on or before December 31, 1999 , and the adjusted amount determined under section 218(c)(8)(B) of the Social Security Act for any calendar year commencing on or after January 1, 2000 , with respect to service performed during such calendar year, or (VI) by an individual in a position described in section 1402(c)(2)(E). As used in this subparagraph, the terms “State” and “political subdivision” have the meanings given those terms in section 218(b) of the Social Security Act. (C) Exception for current employment which continues Service performed for an employer shall not be treated as employment by reason of subparagraph (A) if— (i) such service would be excluded from the term “employment” for purposes of this chapter if subparagraph (A) did not apply; (ii) such service is performed by an individual— (I) who was performing substantial and regular service for remuneration for that employer before April 1, 1986 , (II) who is a bona fide employee of that employer on March 31, 1986 , and (III) whose employment relationship with that employer was not entered into for purposes of meeting the requirements of this subparagraph; and (iii) the employment relationship with that employer has not been terminated after March 31, 1986 . (D) Treatment of agencies and instrumentalities For purposes of subparagraph (C), under regulations— (i) All agencies and instrumentalities of a State (as defined in section 218(b) of the Social Security Act) or of the District of Columbia shall be treated as a single employer. (ii) All agencies and instrumentalities of a political subdivision of a State (as so defined) shall be treated as a single employer and shall not be treated as described in clause (i).