Editorial Notes
References in Text
Sections 5(c) and 6(1) of the Peace Corps Act, referred to in subsec. (a)(13), are classified to sections 2504(c) and 2505(1), respectively, of Title 22, Foreign Relations and Intercourse.
Amendments
2018—Subsec. (a). 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.
2017—Subsec. (e). 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.”
Subsec. (i). Pub. L. 115–97, § 13603(b)(1), added subsec. (i).
2008—Subsec. (a)(23). Pub. L. 110–245, § 115(c), added par. (23).
Subsec. (h). Pub. L. 110–245, § 105(a)(1), added subsec. (h).
2005—Subsecs. (g), (h). Pub. L. 109–135 redesignated subsec. (h) as (g).
2004—Subsec. (a). Pub. L. 108–357, § 885(b)(2), inserted concluding provisions.
Subsec. (a)(18). Pub. L. 108–375 substituted “134(b)(4), or 134(b)(5)” for “or 134(b)(4)”.
Subsec. (a)(19). Pub. L. 108–357, § 320(b)(4), inserted “108(f)(4),” after “74(c),”.
2003—Subsec. (a)(18). Pub. L. 108–121 substituted “, 129, or 134(b)(4)” for “or 129”.
Subsec. (a)(22). Pub. L. 108–173 added par. (22).
2001—Subsec. (a)(12)(E). Pub. L. 107–16 added subpar. (E).
1998—Subsec. (a)(19), (21). Pub. L. 105–206 inserted “for” after par. designation.
1996—Subsec. (a)(1). Pub. L. 104–188, § 1704(t)(4)(C), substituted “combat zone compensation” for “combat pay”.
Pub. L. 104–117 inserted before semicolon “to the extent remuneration for such service is excludable from gross income under such section”.
Subsec. (a)(12)(D). Pub. L. 104–188, § 1421(b)(8)(D), added subpar. (D).
Subsec. (a)(21). Pub. L. 104–191 added par. (21).
1990—Subsec. (a)(20). Pub. L. 101–508 added par. (20).
1989—Subsec. (a)(2). 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”.
Subsec. (g). 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.
Subsec. (h). Pub. L. 101–239, § 7631(b), added subsec. (h).
1988—Subsec. (a)(12)(C). Pub. L. 100–647, § 1011(f)(9), substituted “section 402(h)(1) and (2)” for “section 219” and “an exclusion” for “a deduction”.
Subsec. (a)(15). Pub. L. 100–647, § 1001(g)(4)(B)(iii), inserted “(determined without regard to section 274(n))” after “section 217”.
Subsec. (a)(19), (20). 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.
Subsec. (g). Pub. L. 100–647, § 1011B(a)(22)(D), added subsec. (g) relating to benefits provided under certain employee benefit plans.
1986—Subsec. (a)(8)(D). Pub. L. 99–514, § 1272(c), added subpar. (D).
Subsec. (a)(20). Pub. L. 99–514, § 122(e)(4), inserted reference to section 74(c).
1984—Subsec. (a). Pub. L. 98–369, § 531(d)(4)(A), inserted “(including benefits)” in introductory provisions.
Subsec. (a)(12). 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).
Subsec. (a)(20). Pub. L. 98–369, § 531(d)(4)(B), added par. (20).
1983—Subsec. (a)(12)(D). Pub. L. 97–448 substituted “section 219” for “section 219(a)”.
1981—Subsec. (a)(12)(D). Pub. L. 97–34, § 311(h)(6), substituted “section 219(a)” for “section 219(a) or 220(a)”.
Subsec. (a)(18). Pub. L. 97–34, § 124(e)(2)(A), substituted “section 127 or 129” for “section 127”.
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.
Subsec. (a)(19), (20). Pub. L. 97–34, § 112(b)(5), redesignated par. (20) as (19). Former par. (19) redesignated (18).
1980—Subsec. (a)(18) to (20). 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—Subsec. (a)(18). Pub. L. 95–615 added par. (18) relating to payments or benefits excludable from income under section 124.
Pub. L. 95–600 added par. (18) relating to remuneration for which a corresponding deduction is allowable under section 913.
1976—Subsec. (a)(6). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (a)(12)(D). Pub. L. 94–455, § 1501(b)(7), inserted “or 220(a)” after “section 219(a)”.
Subsec. (a)(17). Pub. L. 94–455, § 1207(e)(1)(C), added par. (17).
Subsec. (c). Pub. L. 94–455, § 1903(c), struck out “Territory” after “a State”.
1974—Subsec. (a)(12)(D). Pub. L. 93–406 added subpar. (D).
1972—Subsec. (a)(1). 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)”.
1966—Subsec. (a)(6), (7). 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”.
1965—Subsec. (a)(16). Pub. L. 89–97, § 313(d)(2), added par. (16).
Subsec. (f). Pub. L. 89–97, § 313(d)(1), added subsec. (f).
1964—Subsec. (a)(14). Pub. L. 88–272, § 204(b), added par. (14).
Subsec. (a)(15). Pub. L. 88–272, § 213(c), added par. (15).
1962—Subsec. (a)(12)(B), (C). 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).
1961—Subsec. (a)(6)(C). Pub. L. 87–256 added subpar. (C).
Subsec. (a)(13). Pub. L. 87–293 added par. (13).
1955—Subsec. (a). 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.
Statutory Notes and Related Subsidiaries
Effective Date of 2004 Amendments
Amendment by Pub. L. 108–375 applicable to travel benefits provided after Oct. 28, 2004, see section 585(b)(3) of Pub. L. 108–375, set out as a note under section 134 of this title.
Amendment by section 320(b)(4) of Pub. L. 108–357 applicable to amounts received by an individual in taxable years beginning after Dec. 31, 2003, see section 320(c) of Pub. L. 108–357, set out as a note under section 108 of this title.
Amendment by section 885(b)(2) of Pub. L. 108–357 applicable to amounts deferred after Dec. 31, 2004, with special rules relating to earnings and material modifications and exception for nonelective deferred compensation, see section 885(d) of Pub. L. 108–357, set out as an Effective Date note under section 409A of this title.
Effective Date of 1988 Amendment
Amendment by sections 1001(g)(4)(B)(iii), 1011(f)(9), and 1011B(a)(33) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Amendment by section 1011B(a)(22)(D) of Pub. L. 100–647 not applicable to any individual who separated from service with the employer before Jan. 1, 1989, see section 1011B(a)(22)(F) of Pub. L. 100–647, set out as a note under section 3121 of this title.
Effective Date of 1978 Amendments
Amendment by Pub. L. 95–615 applicable to remuneration paid after Nov. 8, 1978, but with taxpayers allowed to elect not to have the amendment apply with respect to any taxable year beginning after Dec. 31, 1977, and before Jan. 1, 1979, see section 209(b), (c) of Pub. L. 95–615, set out as a note under section 911 of this title.
Amendment by Pub. L. 95–600 applicable with respect to taxable years beginning after Dec. 31, 1978, see section 164(d) of Pub. L. 95–600, set out as a note under section 127 of this title.
Effective Date of 1972 Amendment
Pub. L. 92–279, § 3(b), Apr. 26, 1972, 86 Stat. 125, provided that:
“The amendments made by section 2 [amending this section] shall apply to
wages paid on or after the first day of the first calendar month which begins more than 30 days after the date of the enactment of this Act [
Apr. 26, 1972].”
Short Title of 1966 Amendment
Pub. L. 89–368, § 1, Mar. 15, 1966, 80 Stat. 38, provided that:
“This Act [enacting sections
276 and
6682 of this title and
section 428 of Title 42, The Public Health and Welfare, amending sections 1402, 1403, 3402, 4061, 4251, 4253, 6015, 6154, 6211, 6412, 6654, 7205, and 7701 of this title and
section 1202 of Title 19, Customs Duties, and enacting provisions set out as notes under sections 276, 3402, 4061, 4251, 6154, and 6654 of this title and
section 428 of Title 42] may be cited as the ‘
Tax Adjustment Act of 1966’.”
Repeals; Amendments and Application of Amendments Unaffected
Section 201(c) of Pub. L. 87–293, cited as a credit to this section, was repealed by Pub. L. 89–572, § 5(a), Sept. 13, 1966, 80 Stat. 765. Such repeal not deemed to affect amendments to this section contained in such provisions, and continuation in full force and effect until modified by appropriate authority of all determinations, authorization, regulations, orders, contracts, agreements, and other actions issued, undertaken, or entered into under authority of the repealed provisions, see section 5(b) of Pub. L. 89–572, set out as a note under former section 2515 of Title 22, Foreign Relations and Intercourse.
Plan Amendments Not Required Until January 1, 1998
For provisions directing that if any amendments made by subtitle D [§§ 1401–1465] of title I of Pub. L. 104–188 require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after Jan. 1, 1998, see section 1465 of Pub. L. 104–188, set out as a note under section 401 of this title.
Controversies Involving Whether Individuals Are Employees for Purposes of Employment Taxes
Pub. L. 95–600, title V, § 530, Nov. 6, 1978, 92 Stat. 2885, as amended by Pub. L. 96–167, § 9(d), Dec. 29, 1979, 93 Stat. 1278; Pub. L. 96–541, § 1, Dec. 17, 1980, 94 Stat. 3204; Pub. L. 97–248, title II, § 269(c)(1), (2), Sept. 3, 1982, 96 Stat. 552; Pub. L. 99–514, § 2, title XVII, § 1706(a), Oct. 22, 1986, 100 Stat. 2095, 2781; Pub. L. 104–188, title I, § 1122(a), Aug. 20, 1996, 110 Stat. 1766; Pub. L. 109–280, title VIII, § 864(a), Aug. 17, 2006, 120 Stat. 1024; Pub. L. 110–458, title I, § 108(m), Dec. 23, 2008, 122 Stat. 5110, provided that:
“(a) Termination of Certain Employment Tax Liability.—
“(1) In general.—If—
“(A)
for purposes of employment taxes, the taxpayer did not treat an individual as an
employee for any period, and
“(B)
in the case of periods after
December 31, 1978, all Federal tax returns (including information returns) required to be filed by the taxpayer with respect to such individual for such period are filed on a basis consistent with the taxpayer’s treatment of such individual as not being an
employee,
then, for purposes of applying such taxes for such period with respect to the taxpayer, the individual shall be deemed not to be an
employee unless the taxpayer had no reasonable basis for not treating such individual as an
employee.
“(2) Statutory standards providing one method of satisfying the requirements of paragraph (1).—For purposes of paragraph (1), a taxpayer shall in any case be treated as having a reasonable basis for not treating an individual as an employee for a period if the taxpayer’s treatment of such individual for such period was in reasonable reliance on any of the following:
“(A)
judicial precedent, published rulings, technical advice with respect to the taxpayer, or a letter ruling to the taxpayer;
“(B)
a past Internal Revenue Service audit of the taxpayer in which there was no assessment attributable to the treatment (for employment tax purposes) of the individuals holding positions substantially similar to the position held by this individual; or
“(C)
long-standing recognized practice of a significant segment of the industry in which such individual was engaged.
“(3) Consistency required in the case of prior tax treatment.—
Paragraph (1) shall not apply with respect to the treatment of any individual for employment tax purposes for any period ending after
December 31, 1978, if the taxpayer (or a predecessor) has treated any individual holding a substantially similar position as an
employee for purposes of the employment taxes for any period beginning after
December 31, 1977.
“(4) Refund or credit of overpayment.—
If refund or credit of any overpayment of an employment tax resulting from the application of paragraph (1) is not barred on the date of the enactment of this Act [Nov. 6, 1978] by any law or rule of law, the period for filing a claim for refund or credit of such overpayment (to the extent attributable to the application of paragraph (1)) shall not expire before the date 1 year after the date of the enactment of this Act.
“(b) Prohibition Against Regulations and Rulings on Employment Status.—
No regulation or Revenue Ruling shall be published on or after the date of the enactment of this Act [Nov. 6, 1978] and before the effective date of any law hereafter enacted clarifying the employment status of individuals for purposes of the employment taxes by the Department of the Treasury (including the Internal Revenue Service) with respect to the employment status of any individual for purposes of the employment taxes.
“(c) Definitions.—For purposes of this section—
“(2) Employment status.—
The term ‘employment status’ means the status of an individual, under the usual common law rules applicable in determining the
employer-employee relationship, as an
employee or as an independent contractor (or other individual who is not an
employee).
“(d) Exception.—
This section shall not apply in the case of an individual who, pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.
“(e) Special Rules for Application of Section.—
“(1) Notice of availability of section.—
An officer or
employee of the
Internal Revenue Service shall, before or at the commencement of any audit inquiry relating to the employment status of one or more individuals who perform services for the taxpayer, provide the taxpayer with a written notice of the provisions of this section.
“(2) Rules relating to statutory standards.—For purposes of subsection (a)(2)—
“(A)
a taxpayer may not rely on an audit commenced after
December 31, 1996, for purposes of subparagraph (B) thereof unless such audit included an examination for employment tax purposes of whether the individual involved (or any individual holding a position substantially similar to the position held by the individual involved) should be treated as an
employee of the taxpayer,
“(B)
in no event shall the significant segment requirement of subparagraph (C) thereof be construed to require a reasonable showing of the practice of more than 25 percent of the industry (determined by not taking into account the taxpayer), and
“(C) in applying the long-standing recognized practice requirement of subparagraph (C) thereof—
“(i)
such requirement shall not be construed as requiring the practice to have continued for more than 10 years, and
“(ii)
a practice shall not fail to be treated as long-standing merely because such practice began after 1978.
“(3) Availability of safe harbors.—
Nothing in this section shall be construed to provide that subsection (a) only applies where the individual involved is otherwise an
employee of the taxpayer.
“(4) Burden of proof.—
“(A) In general.—If—
“(i)
a taxpayer establishes a prima facie case that it was reasonable not to treat an individual as an
employee for purposes of this section, and
“(ii)
the taxpayer has fully cooperated with reasonable requests from the Secretary of the Treasury or his delegate,
then the burden of proof with respect to such treatment shall be on the Secretary.
“(B) Exception for other reasonable basis.—
In the case of any issue involving whether the taxpayer had a reasonable basis not to treat an individual as an
employee for purposes of this section, subparagraph (A) shall only apply for purposes of determining whether the taxpayer meets the requirements of subparagraph (A), (B), or (C) of subsection (a)(2).
“(5) Preservation of prior period safe harbor.—If—
“(A)
an individual would (but for the treatment referred to in subparagraph (B)) be deemed not to be an
employee of the taxpayer under subsection (a) for any prior period, and
“(B)
such individual is treated by the taxpayer as an
employee for employment tax purposes for any subsequent period,
then, for purposes of applying such taxes for such prior period with respect to the taxpayer, the individual shall be deemed not to be an
employee.
“(6) Substantially similar position.—
For purposes of this section, the determination as to whether an individual holds a position substantially similar to a position held by another individual shall include consideration of the relationship between the taxpayer and such individuals.
“(f) Treatment of Test Room Supervisors and Proctors Who Assist in the Administration of College Entrance and Placement Exams.—
“(1) In general.—
In the case of an individual described in paragraph (2) who is providing services as a test proctor or room supervisor by assisting in the administration of college entrance or placement examinations, this section shall be applied to such services performed after December 31, 2006 (and remuneration paid for such services) without regard to subsection (a)(3) thereof.
“(2) Applicability.—An individual is described in this paragraph if the individual—
“(A)
is providing the services described in subsection (a) to an organization described in section 501(c), and exempt from tax under section 501(a), of the
Internal Revenue Code of 1986, and
“(B)
is not otherwise treated as an
employee of such organization for purposes of subtitle C of such Code (relating to employment taxes).”
[Pub. L. 109–280, title VIII, § 864(b), Aug. 17, 2006, 120 Stat. 1024, provided that:
“The amendment made by this section [amending
section 530 of Pub. L. 95–600, set out above] shall apply to remuneration for services performed after
December 31, 2006.”
]
[Pub. L. 104–188, title I, § 1122(b), Aug. 20, 1996, 110 Stat. 1767, provided that:
[“(1) In general.—The amendment made by this section [amending section 530 of Pub. L. 95–600, set out above] shall apply to periods after December 31, 1996.
[“(2) Notice by internal revenue service.—Section 530(e)(1) of the Revenue Act of 1978 [Pub. L. 95–600] (as added by subsection (a)) shall apply to audits which commence after December 31, 1996.
[“(3) Burden of proof.—
[“(A) In general.—Section 530(e)(4) of the Revenue Act of 1978 (as added by subsection (a)) shall apply to disputes involving periods after December 31, 1996.
[“(B) No inference.—Nothing in the amendments made by this section shall be construed to infer the proper treatment of the burden of proof with respect to disputes involving periods before January 1, 1997.”]
[Pub. L. 99–514, title XVII, § 1706(b), Oct. 22, 1986, 100 Stat. 2781, provided that:
“The amendment made by this section [amending
section 530 of Pub. L. 95–600, set out above] shall apply to remuneration paid and services rendered after
December 31, 1986.”
]
