Internal Revenue Code:Sec. 1402. Definitions
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TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME
Statute
Sec. 1402. Definitions
(a) Net earnings from self-employment
The term ''net earnings from self-employment'' means the gross
income derived by an individual from any trade or business carried
on by such individual, less the deductions allowed by this subtitle
which are attributable to such trade or business, plus his
distributive share (whether or not distributed) of income or loss
described in section 702(a)(8) from any trade or business carried
on by a partnership of which he is a member; except that in
computing such gross income and deductions and such distributive
share of partnership ordinary income or loss -
(1) there shall be excluded rentals from real estate and from
personal property leased with the real estate (including such
rentals paid in crop shares) together with the deductions
attributable thereto, unless such rentals are received in the
course of a trade or business as a real estate dealer; except
that the preceding provisions of this paragraph shall not apply
to any income derived by the owner or tenant of land if (A) such
income is derived under an arrangement, between the owner or
tenant and another individual, which provides that such other
individual shall produce agricultural or horticultural
commodities (including livestock, bees, poultry, and fur-bearing
animals and wildlife) on such land, and that there shall be
material participation by the owner or tenant (as determined
without regard to any activities of an agent of such owner or
tenant) in the production or the management of the production of
such agricultural or horticultural commodities, and (B) there is
material participation by the owner or tenant (as determined
without regard to any activities of an agent of such owner or
tenant) with respect to any such agricultural or horticultural
commodity;
(2) there shall be excluded dividends on any share of stock,
and interest on any bond, debenture, note, or certificate, or
other evidence of indebtedness, issued with interest coupons or
in registered form by any corporation (including one issued by a
government or political subdivision thereof), unless such
dividends and interest are received in the course of a trade or
business as a dealer in stocks or securities;
(3) there shall be excluded any gain or loss -
(A) which is considered as gain or loss from the sale or
exchange of a capital asset,
(B) from the cutting of timber, or the disposal of timber,
coal, or iron ore, if section 631 applies to such gain or loss,
or
(C) from the sale, exchange, involuntary conversion, or other
disposition of property if such property is neither -
(i) stock in trade or other property of a kind which would
properly be includible in inventory if on hand at the close
of the taxable year, nor
(ii) property held primarily for sale to customers in the
ordinary course of the trade or business;
(4) the deduction for net operating losses provided in section
172 shall not be allowed;
(5) if -
(A) any of the income derived from a trade or business (other
than a trade or business carried on by a partnership) is
community income under community property laws applicable to
such income, the gross income and deductions attributable to such
trade or business shall be treated as the gross income and deductions
of the spouse carrying on such trade or business or, if such trade or
business is jointly operated, treated as the gross income and deductions
of each spouse on the basis of their respective distributive share of
the gross income and deductions; and
(B) any portion of a partner's distributive share of the
ordinary income or loss from a trade or business carried on by
a partnership is community income or loss under the community
property laws applicable to such share, all of such
distributive share shall be included in computing the net
earnings from self-employment of such partner, and no part of
such share shall be taken into account in computing the net
earnings from self-employment of the spouse of such partner;
(6) a resident of Puerto Rico shall compute his net earnings
from self-employment in the same manner as a citizen of the
United States but without regard to section 933;
(7) the deduction for personal exemptions provided in section
151 shall not be allowed;
(8) an individual who is a duly ordained, commissioned, or
licensed minister of a church or a member of a religious order
shall compute his net earnings from self-employment derived from
the performance of service described in subsection (c)(4) without
regard to section 107 (relating to rental value of parsonages),
section 119 (relating to meals and lodging furnished for the
convenience of the employer), and section 911 (relating to
citizens or residents of the United States living abroad), but
shall not include in such net earnings from self-employment the
rental value of any parsonage or any parsonage allowance (whether
or not excludable under section 107) provided after the
individual retires, or any other retirement benefit received by
such individual from a church plan (as defined in section 414(e))
after the individual retires;
(9) the exclusion from gross income provided by section 931
shall not apply;
(10) there shall be excluded amounts received by a partner
pursuant to a written plan of the partnership, which meets such
requirements as are prescribed by the Secretary, and which
provides for payments on account of retirement, on a periodic
basis, to partners generally or to a class or classes of
partners, such payments to continue at least until such partner's
death, if -
(A) such partner rendered no services with respect to any
trade or business carried on by such partnership (or its
successors) during the taxable year of such partnership (or its
successors), ending within or with his taxable year, in which
such amounts were received, and
(B) no obligation exists (as of the close of the
partnership's taxable year referred to in subparagraph (A))
from the other partners to such partner except with respect to
retirement payments under such plan, and
(C) such partner's share, if any, of the capital of the
partnership has been paid to him in full before the close of
the partnership's taxable year referred to in subparagraph (A);
(11) the exclusion from gross income provided by section
911(a)(1) shall not apply;
(12) in lieu of the deduction provided by section 164(f)
(relating to deduction for one-half of self-employment taxes),
there shall be allowed a deduction equal to the product of -
(A) the taxpayer's net earnings from self-employment for the
taxable year (determined without regard to this paragraph), and
(B) one-half of the sum of the rates imposed by subsections
(a) and (b) of section 1401 for such year;
(13) there shall be excluded the distributive share of any item
of income or loss of a limited partner, as such, other than
guaranteed payments described in section 707(c) to that partner
for services actually rendered to or on behalf of the partnership
to the extent that those payments are established to be in the
nature of remuneration for those services;
(14) in the case of church employee income, the special rules
of subsection (j)(1) shall apply;
(15) in the case of a member of an Indian tribe, the special
rules of section 7873 (relating to income derived by Indians from
exercise of fishing rights) shall apply;
(16) the deduction provided by section 199 shall not be allowed.
If the taxable year of a partner is different from that of the
partnership, the distributive share which he is required to include
in computing his net earnings from self-employment shall be based
on the ordinary income or loss of the partnership for any taxable
year of the partnership ending within or with his taxable year. In
the case of any trade or business which is carried on by an
individual or by a partnership and in which, if such trade or
business were carried on exclusively by employees, the major
portion of the services would constitute agricultural labor as
defined in section 3121(g) -
(i) in the case of an individual, if the gross income derived
by him from such trade or business is not more than $2,400, the
net earnings from self-employment derived by him from such trade
or business may, at his option, be deemed to be 66 2/3 percent of
such gross income; or
(ii) in the case of an individual, if the gross income derived
by him from such trade or business is more than $2,400 and the
net earnings from self-employment derived by him from such trade
or business (computed under this subsection without regard to
this sentence) are less than $1,600, the net earnings from
self-employment derived by him from such trade or business may,
at his option, be deemed to be $1,600; and
(iii) in the case of a member of a partnership, if his
distributive share of the gross income of the partnership derived
from such trade or business (after such gross income has been
reduced by the sum of all payments to which section 707(c)
applies) is not more than $2,400, his distributive share of
income described in section 702(a)(8) derived from such trade or
business may, at his option, be deemed to be an amount equal to
66 2/3 percent of his distributive share of such gross income
(after such gross income has been so reduced); or
(iv) in the case of a member of a partnership, if his
distributive share of the gross income of the partnership derived
from such trade or business (after such gross income has been
reduced by the sum of all payments to which section 707(c)
applies) is more than $2,400 and his distributive share (whether
or not distributed) of income described in section 702(a)(8)
derived from such trade or business (computed under this
subsection without regard to this sentence) is less than $1,600,
his distributive share of income described in section 702(a)(8)
derived from such trade or business may, at his option, be deemed
to be $1,600.
For purposes of the preceding sentence, gross income means -
(v) in the case of any such trade or business in which the
income is computed under a cash receipts and disbursements
method, the gross receipts from such trade or business reduced by
the cost or other basis of property which was purchased and sold
in carrying on such trade or business, adjusted (after such
reduction) in accordance with the provisions of paragraphs (1)
through (7) and paragraph (9) of this subsection; and
(vi) in the case of any such trade or business in which the
income is computed under an accrual method, the gross income from
such trade or business, adjusted in accordance with the
provisions of paragraphs (1) through (7) and paragraph (9) of
this subsection;
and, for purposes of such sentence, if an individual (including a
member of a partnership) derives gross income from more than one
such trade or business, such gross income (including his
distributive share of the gross income of any partnership derived
from any such trade or business) shall be deemed to have been
derived from one trade or business.
The preceding sentence and clauses (i) through (iv) of the second
preceding sentence shall also apply in the case of any trade or
business (other than a trade or business specified in such second
preceding sentence) which is carried on by an individual who is
self-employed on a regular basis as defined in subsection (h), or
by a partnership of which an individual is a member on a regular
basis as defined in subsection (h), but only if such individual's
net earnings from self-employment as determined without regard to
this sentence in the taxable year are less than $1,600 and less
than 66 2/3 percent of the sum (in such taxable year) of such
individual's gross income derived from all trades or businesses
carried on by him and his distributive share of the income or loss
from all trades or businesses carried on by all the partnerships of
which he is a member; except that this sentence shall not apply to
more than 5 taxable years in the case of any individual, and in no
case in which an individual elects to determine the amount of his
net earnings from self-employment for a taxable year under the
provisions of the two preceding sentences with respect to a trade
or business to which the second preceding sentence applies and with
respect to a trade or business to which this sentence applies shall
such net earnings for such year exceed $1,600; and
(17) notwithstanding the preceding provisions of this
subsection, each spouse's share of income or loss from a
qualified joint venture shall be taken into account as provided
in section 761(f) in determining net earnings from self-
employment of such spouse.
(b) Self-employment income
The term ''self-employment income'' means the net earnings from
self-employment derived by an individual (other than a nonresident
alien individual, except as provided by an agreement under section
233 of the Social Security Act) during any taxable year; except
that such term shall not include -
(1) in the case of the tax imposed by section 1401(a), that
part of the net earnings from self-employment which is in excess
of (i) an amount equal to the contribution and benefit base (as
determined under section 230 of the Social Security Act) which is
effective for the calendar year in which such taxable year
begins, minus (ii) the amount of the wages paid to such
individual during such taxable years; or
(2) the net earnings from self-employment, if such net earnings
for the taxable year are less than $400.
For purposes of paragraph (1), the term ''wages'' (A) includes such
remuneration paid to an employee for services included under an
agreement entered into pursuant to the provisions of section
3121(l) (relating to coverage of citizens of the United States who
are employees of foreign affiliates of American employers), as
would be wages under section 3121(a) if such services constituted
employment under section 3121(b), and (B) includes compensation
which is subject to the tax imposed by section 3201 or 3211,.
(FOOTNOTE 1) An individual who is not a citizen of the United
States but who is a resident of the Commonwealth of Puerto Rico,
the Virgin Islands, Guam, or American Samoa shall not, for purposes
of this chapter be considered to be a nonresident alien
individual. In the case of church employee income, the special
rules of subsection (j)(2) shall apply for purposes of paragraph
(2).
(FOOTNOTE 1) So in original.
(c) Trade or business
The term ''trade or business'', when used with reference to
self-employment income or net earnings from self-employment, shall
have the same meaning as when used in section 162 (relating to
trade or business expenses), except that such term shall not
include -
(1) the performance of the functions of a public office, other
than the functions of a public office of a State or a political
subdivision thereof with respect to fees received in any period
in which the functions are performed in a position compensated
solely on a fee basis and in which such functions are not covered
under an agreement entered into by such State and the
Commissioner of Social Security pursuant to section 218 of the
Social Security Act;
(2) the performance of service by an individual as an employee,
other than -
(A) service described in section 3121(b)(14)(B) performed by
an individual who has attained the age of 18,
(B) service described in section 3121(b)(16),
(C) service described in section 3121(b)(11), (12), or (15)
performed in the United States (as defined in section
3121(e)(2)) by a citizen of the United States, except service
which constitutes ''employment'' under section 3121(y),
(D) service described in paragraph (4) of this subsection,
(E) service performed by an individual as an employee of a
State or a political subdivision thereof in a position
compensated solely on a fee basis with respect to fees received
in any period in which such service is not covered under an
agreement entered into by such State and the Commissioner of
Social Security pursuant to section 218 of the Social Security
Act,
(F) service described in section 3121(b) (20), and
(G) service described in section 3121(b)(8)(B);
(3) the performance of service by an individual as an employee
or employee representative as defined in section 3231;
(4) the performance of service 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;
(5) the performance of service by an individual in the exercise
of his profession as a Christian Science practitioner; or
(6) the performance of service by an individual during the
period for which an exemption under subsection (g) is effective
with respect to him.
The provisions of paragraph (4) or (5) shall not apply to service
(other than service performed by a member of a religious order who
has taken a vow of poverty as a member of such order) performed by
an individual unless an exemption under subsection (e) is effective
with respect to him.
(d) Employee and wages
The term ''employee'' and the term ''wages'' shall have the same
meaning as when used in chapter 21 (sec. 3101 and following,
relating to Federal Insurance Contributions Act).
(e) Ministers, members of religious orders, and Christian Science
practitioners
(1) Exemption
Subject to paragraph (2), any individual who is (A) a duly
ordained, commissioned, or licensed minister of a church or a
member of a religious order (other than a member of a religious
order who has taken a vow of poverty as a member of such order)
or (B) a Christian Science practitioner, upon filing an
application (in such form and manner, and with such official, as
may be prescribed by regulations made under this chapter)
together with a statement that either he is conscientiously
opposed to, or because of religious principles he is opposed to,
the acceptance (with respect to services performed by him as such
minister, member, or practitioner) of any public insurance which
makes payments in the event of death, disability, old age, or
retirement or makes payments toward the cost of, or provides
services for, medical care (including the benefits of any
insurance system established by the Social Security Act) and, in
the case of an individual described in subparagraph (A), that he
has informed the ordaining, commissioning, or licensing body of
the church or order that he is opposed to such insurance, shall
receive an exemption from the tax imposed by this chapter with
respect to services performed by him as such minister, member, or
practitioner. Notwithstanding the preceding sentence, an
exemption may not be granted to an individual under this
subsection if he had filed an effective waiver certificate under
this section as it was in effect before its amendment in 1967.
(2) Verification of application
The Secretary may approve an application for an exemption filed
pursuant to paragraph (1) only if the Secretary has verified that
the individual applying for the exemption is aware of the grounds
on which the individual may receive an exemption pursuant to this
subsection and that the individual seeks exemption on such
grounds. The Secretary (or the Commissioner of Social Security
under an agreement with the Secretary) shall make such
verification by such means as prescribed in regulations.
(3) Time for filing application
Any individual who desires to file an application pursuant to
paragraph (1) must file such application on or before whichever
of the following dates is later: (A) the due date of the return
(including any extension thereof) for the second taxable year for
which he has net earnings from self-employment (computed without
regard to subsections (c)(4) and (c)(5)) of $400 or more, any
part of which was derived from the performance of service
described in subsection (c)(4) or (c)(5); or (B) the due date of
the return (including any extension thereof) for his second
taxable year ending after 1967.
(4) Effective date of exemption
An exemption received by an individual pursuant to this
subsection shall be effective for the first taxable year for
which he has net earnings from self-employment (computed without
regard to subsections (c)(4) and (c)(5)) of $400 or more, any
part of which was derived from the performance of service
described in subsection (c)(4) or (c)(5), and for all succeeding
taxable years. An exemption received pursuant to this subsection
shall be irrevocable.
(f) Partner's taxable year ending as the result of death
In computing a partner's net earnings from self-employment for
his taxable year which ends as a result of his death (but only if
such taxable year ends within, and not with, the taxable year of
the partnership), there shall be included so much of the deceased
partner's distributive share of the partnership's ordinary income
or loss for the partnership taxable year as is not attributable to
an interest in the partnership during any period beginning on or
after the first day of the first calendar month following the month
in which such partner died. For purposes of this subsection -
(1) in determining the portion of the distributive share which
is attributable to any period specified in the preceding
sentence, the ordinary income or loss of the partnership shall be
treated as having been realized or sustained ratably over the
partnership taxable year; and
(2) the term ''deceased partner's distributive share'' includes
the share of his estate or of any other person succeeding, by
reason of his death, to rights with respect to his partnership
interest.
(g) Members of certain religious faiths
(1) Exemption
Any individual may file an application (in such form and
manner, and with such official, as may be prescribed by
regulations under this chapter) for an exemption from the tax
imposed by this chapter if he is a member of a recognized
religious sect or division thereof and is an adherent of
established tenets or teachings of such sect or division by
reason of which he is conscientiously opposed to acceptance of
the benefits of any private or public insurance which makes
payments in the event of death, disability, old-age, or
retirement or makes payments toward the cost of, or provides
services for, medical care (including the benefits of any
insurance system established by the Social Security Act). Such
exemption may be granted only if the application contains or is
accompanied by -
(A) such evidence of such individual's membership in, and
adherence to the tenets or teachings of, the sect or division
thereof as the Secretary may require for purposes of
determining such individual's compliance with the preceding
sentence, and
(B) his waiver of all benefits and other payments under
titles II and XVIII of the Social Security Act on the basis of
his wages and self-employment income as well as all such
benefits and other payments to him on the basis of the wages
and self-employment income of any other person,
and only if the Commissioner of Social Security finds that -
(C) such sect or division thereof has the established tenets
or teachings referred to in the preceding sentence,
(D) it is the practice, and has been for a period of time
which he deems to be substantial, for members of such sect or
division thereof to make provision for their dependent members
which in his judgment is reasonable in view of their general
level of living, and
(E) such sect or division thereof has been in existence at
all times since December 31, 1950.
An exemption may not be granted to any individual if any benefit
or other payment referred to in subparagraph (B) became payable
(or, but for section 203 or 222(b) of the Social Security Act,
would have become payable) at or before the time of the filing of
such waiver.
(2) Period for which exemption effective
An exemption granted to any individual pursuant to this
subsection shall apply with respect to all taxable years
beginning after December 31, 1950, except that such exemption
shall not apply for any taxable year -
(A) beginning (i) before the taxable year in which such
individual first met the requirements of the first sentence of
paragraph (1), or (ii) before the time as of which the
Commissioner of Social Security finds that the sect or division
thereof of which such individual is a member met the
requirements of subparagraphs (C) and (D), or
(B) ending (i) after the time such individual ceases to meet
the requirements of the first sentence of paragraph (1), or
(ii) after the time as of which the Commissioner of Social
Security finds that the sect or division thereof of which he is
a member ceases to meet the requirements of subparagraph (C) or
(D).
(3) Subsection to apply to certain church employees
This subsection shall apply with respect to services which are
described in subparagraph (B) of section 3121(b)(8) (and are not
described in subparagraph (A) of such section).
(h) Regular basis
An individual shall be deemed to be self-employed on a regular
basis in a taxable year, or to be a member of a partnership on a
regular basis in such year, if he had net earnings from
self-employment, as defined in the first sentence of subsection
(a), of not less than $400 in at least two of the three consecutive
taxable years immediately preceding such taxable year from trades
or businesses carried on by such individual or such partnership.
(i) Special rules for options and commodities dealers
(1) In general
Notwithstanding subsection (a)(3)(A), in determining the net
earnings from self-employment of any options dealer or
commodities dealer, there shall not be excluded any gain or loss
(in the normal course of the taxpayer's activity of dealing in or
trading section 1256 contracts) from section 1256 contracts or
property related to such contracts.
(2) Definitions
For purposes of this subsection -
(A) Options dealer
The term ''options dealer'' has the meaning given such term
by section 1256(g)(8).
(B) Commodities dealer
The term ''commodities dealer'' means a person who is
actively engaged in trading section 1256 contracts and is
registered with a domestic board of trade which is designated
as a contract market by the Commodities Futures Trading
Commission.
(C) Section 1256 contracts
The term ''section 1256 contract'' has the meaning given to
such term by section 1256(b).
(j) Special rules for certain church employee income
(1) Computation of net earnings
In applying subsection (a) -
(A) church employee income shall not be reduced by any
deduction;
(B) church employee income and deductions attributable to
such income shall not be taken into account in determining the
amount of other net earnings from self-employment.
(2) Computation of self-employment income
(A) Separate application of subsection (b)(2)
Paragraph (2) of subsection (b) shall be applied separately -
(i) to church employee income, and
(ii) to other net earnings from self-employment.
(B) $100 floor
In applying paragraph (2) of subsection (b) to church
employee income, ''$100'' shall be substituted for ''$400''.
(3) Coordination with subsection (a)(12)
Paragraph (1) shall not apply to any amount allowable as a
deduction under subsection (a)(12), and paragraph (1) shall be
applied before determining the amount so allowable.
(4) Church employee income defined
For purposes of this section, the term ''church employee
income'' means gross income for services which are described in
section 3121(b)(8)(B) (and are not described in section
3121(b)(8)(A)).
(k) Codification of treatment of certain termination payments
received by former insurance salesmen
Nothing in subsection (a) shall be construed as including in the
net earnings from self-employment of an individual any amount
received during the taxable year from an insurance company on
account of services performed by such individual as an insurance
salesman for such company if -
(1) such amount is received after termination of such
individual's agreement to perform such services for such company,
(2) such individual performs no services for such company after
such termination and before the close of such taxable year,
(3) such individual enters into a covenant not to compete
against such company which applies to at least the 1-year period
beginning on the date of such termination, and
(4) the amount of such payment -
(A) depends primarily on policies sold by or credited to the
account of such individual during the last year of such
agreement or the extent to which such policies remain in force
for some period after such termination, or both, and
(B) does not depend to any extent on length of service or
overall earnings from services performed for such company
(without regard to whether eligibility for payment depends on
length of service).
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202(f)(5), Nov. 8, 1978, 92 Stat. 3100, renumbered Sec. 202(g)(5),
Pub. L. 96-222, title I, Sec. 108(a)(1)(A), Apr. 1, 1980, 94 Stat.
223; Pub. L. 97-34, title I, Sec. 111(b)(3), (5), Aug. 13, 1981, 95
Stat. 194; Pub. L. 97-248, title II, Sec. 278(a)(2), Sept. 3, 1982,
96 Stat. 559; Pub. L. 98-21, title I, Sec. 124(c)(2), title III,
Sec. 321(e)(3), 322(b)(2), 323(b)(1), Apr. 20, 1983, 97 Stat. 90,
120, 121; Pub. L. 98-369, div. A, title I, Sec. 102(c)(1), div.
B, title VI, Sec. 2603(c)(2), (d)(2), 2663(j)(5)(B), July 18, 1984,
98 Stat. 622, 1129, 1130, 1171; Pub. L. 99-272, title XIII, Sec.
13205(a)(2)(B), Apr. 7, 1986, 100 Stat. 315; Pub. L. 99-509, title
IX, Sec. 9002(b)(1)(B), Oct. 21, 1986, 100 Stat. 1971; Pub. L.
99-514, title III, Sec. 301(b)(12), title XII, Sec. 1272(d)(8),
(9), title XVII, Sec. 1704(a)(1), (2), title XVIII, Sec. 1882(a),
(b)(1), 1883(a)(11)(A), Oct. 22, 1986, 100 Stat. 2218, 2594, 2779,
2914, 2916; Pub. L. 100-203, title IX, Sec. 9022(b), Dec. 22, 1987,
101 Stat. 1330-295; Pub. L. 100-647, title III, Sec. 3043(c)(1),
title VIII, Sec. 8007(c), Nov. 10, 1988, 102 Stat. 3642, 3783; Pub.
L. 101-239, title X, Sec. 10204(a)(1), Dec. 19, 1989, 103 Stat.
2474; Pub. L. 101-508, title V, Sec. 5123(a)(3), 5130(a)(2), title
XI, Sec. 11331(b), Nov. 5, 1990, 104 Stat. 1388-284, 1388-289,
1388-467; Pub. L. 103-66, title XIII, Sec. 13207(b), Aug. 10, 1993,
107 Stat. 468; Pub. L. 103-296, title I, Sec. 108(h)(1), title III,
Sec. 319(a)(4), Aug. 15, 1994, 108 Stat. 1487, 1534; Pub. L.
104-188, title I, Sec. 1456(a), Aug. 20, 1996, 110 Stat. 1818; Pub.
L. 105-34, title IX, Sec. 922(a), Aug. 5, 1997, 111 Stat. 879.)
References in Text
REFERENCES IN TEXT
The Social Security Act, referred to in subsecs. (b), (c)(1),
(2)(E), (e)(1), and (g)(1), is act Aug. 14, 1935, ch. 531, 49 Stat.
620, as amended, which is classified generally to chapter 7 (Sec.
301 et seq.) of Title 42, The Public Health and Welfare. Titles II
and XVIII of the Act are classified generally to subchapters II
(Sec. 401 et seq.) and XVIII (Sec. 1395 et seq.) of Title 42.
Sections 203, 218, 222, 230, and 233 of the Act are classified to
sections 403, 418, 422, 430, and 433, respectively, of Title 42.
For complete classification of this Act to the Code, see section
1305 of Title 42 and Tables.
The Federal Insurance Contributions Act, referred to in subsec.
(d), is act Aug. 16, 1954, ch. 736, 68A Stat. 415, as amended,
which is classified generally to chapter 21 (Sec. 3101 et seq.) of
this title. For complete classification of this Act to the Code,
see section 3128 of this title and Tables.
Miscellaneous
AMENDMENTS
2007 - PL 110-28
SEC. 8215. FAMILY BUSINESS TAX SIMPLIFICATION.
(b) Net Earnings From Self-Employment.--
(1) Subsection (a) of section 1402 (defining net earnings
from self-employment) is amended by striking ``, and'' at the
end of paragraph (15) and inserting a semicolon, by striking the
period at the end of paragraph (16) and inserting ``; and'', and
by inserting after paragraph (16) the following new paragraph:
``(17) notwithstanding the preceding provisions of this
subsection, each spouse's share of income or loss from a
qualified joint venture shall be taken into account as provided
in section 761(f) in determining net earnings from self-
employment of such spouse.''.
2004 - Pub. L. 108-203, Sec 425(b). Section 1402(a)(5)(A)
of the Internal Revenue Code of 1986 <<NOTE: 26 USC 1402.>> is amended
by striking ``all of the gross income'' and all that follows and
inserting ``the gross income and deductions attributable to such
trade or business shall be treated as the gross income and deductions of
the spouse carrying on such trade or business or, if such trade or
business is jointly operated, treated as the gross income and deductions
of each spouse on the basis of their respective distributive share of
the gross income and deductions; and''
2004 - Pub. L. 108-357, Sec. 102(d)(7). Subsection (a)
of section 1402 is amended by striking ``and'' at the end of
paragraph (14), by striking the period at the end of paragraph (15)
and inserting ``, and'', and by inserting after paragraph (15) the
following new paragraph:
(16) the deduction provided by section 199 shall not be allowed.
1997 - Subsec. (k). Pub. L. 105-34 added subsec. (k).
1996 - Subsec. (a)(8). Pub. L. 104-188 inserted before semicolon
at end '', but shall not include in such net earnings from
self-employment the rental value of any parsonage or any parsonage
allowance (whether or not excludable under section 107) provided
after the individual retires, or any other retirement benefit
received by such individual from a church plan (as defined in
section 414(e)) after the individual retires''.
1994 - Subsec. (c)(1). Pub. L. 103-296, Sec. 108(h)(1),
substituted ''Commissioner of Social Security'' for ''Secretary of
Health and Human Services''.
Subsec. (c)(2)(C). Pub. L. 103-296, Sec. 319(a)(4), inserted at
end ''except service which constitutes 'employment' under section
3121(y),''.
Subsecs. (c)(2)(E), (e)(2), (g)(1), (2)(A), (B). Pub. L. 103-296,
Sec. 108(h)(1), substituted ''Commissioner of Social Security'' for
''Secretary of Health and Human Services''.
1993 - Subsec. (b). Pub. L. 103-66, Sec. 13207(b)(1)(C), (D), in
concluding provisions, inserted ''and'' after ''section 3121(b),''
and struck out ''and (C) includes, but only with respect to the tax
imposed by section 1401(b), remuneration paid for medicare
qualified government employment (as defined in section 3121(u)(3))
which is subject to the taxes imposed by sections 3101(b) and
3111(b)'' after ''section 3201 or 3211,''.
Subsec. (b)(1). Pub. L. 103-66, Sec. 13207(b)(1)(A), (B),
substituted ''in the case of the tax imposed by section 1401(a),
that part of the net'' for ''that part of the net'' and
''contribution and benefit base (as determined under section 230 of
the Social Security Act)'' for ''applicable contribution base (as
determined under subsection (k))''.
Subsec. (k). Pub. L. 103-66, Sec. 13207(b)(2), struck out subsec.
(k) which defined parameters of the applicable contribution base
under this chapter.
1990 - Subsec. (a). Pub. L. 101-508, Sec. 5123(a)(3), struck out
last undesignated par. which read as follows: ''Any income of an
individual which results from or is attributable to the performance
of services by such individual as a director of a corporation
during any taxable year shall be deemed to have been derived (and
received) by such individual in that year, at the time the services
were performed, regardless of when the income is actually paid to
or received by such individual (unless it was actually paid and
received prior to that year).''
Subsec. (b). Pub. L. 101-508, Sec. 5130(a)(2), amended directory
language of Pub. L. 98-21, Sec. 322(b)(2). See 1983 Amendment note
below.
Subsec. (b)(1)(i). Pub. L. 101-508, Sec. 11331(b)(1), substituted
''the applicable contribution base (as determined under subsection
(k))'' for ''the contribution and benefit base (as determined under
section 230 of the Social Security Act)''.
Subsec. (k). Pub. L. 101-508, Sec. 11331(b)(2), added subsec.
(k).
1989 - Subsec. (g)(3). Pub. L. 101-239 substituted ''to apply''
for ''not to apply'' in heading and ''shall apply'' for ''shall not
apply'' in text.
1988 - Subsec. (a)(15). Pub. L. 100-647, Sec. 3043(c)(1), added
par. (15).
Subsec. (g)(2) to (5). Pub. L. 100-647, Sec. 8007(c), struck out
par. (2) which related to time for filing applications, struck out
par. (4) which related to application by fiduciaries or survivors,
and redesignated pars. (3) and (5) as (2) and (3), respectively.
1987 - Subsec. (a). Pub. L. 100-203 inserted par. at end relating
to income of an individual which results from or is attributable to
the performance of services by such individual as a director of a
corporation.
1986 - Subsec. (a)(8). Pub. L. 99-514, Sec. 1272(d)(8), inserted
''and'' after ''of the employer),'' and struck out ''and section
931 (relating to income from sources within possessions of the
United States)'' after ''living abroad)''.
Subsec. (a)(9). Pub. L. 99-514, Sec. 1272(d)(9), amended par. (9)
generally. Prior to amendment, par. (9) read as follows: ''the
term 'possession of the United States' as used in sections 931
(relating to income from sources within possessions of the United
States) and 932 (relating to citizens of possessions of the United
States) shall be deemed not to include the Virgin Islands, Guam, or
American Samoa;''.
Subsec. (a)(14). Pub. L. 99-514, Sec. 1882(b)(1)(B)(i), amended
par. (14) generally. Prior to amendment, par. (14) read as
follows: ''with respect to remuneration for services which are
treated as services in a trade or business under subsection
(c)(2)(G) -
''(A) no deduction for trade or business expenses provided
under this Code (other than the deduction under paragraph (12))
shall apply;
''(B) the provisions of subsection (b)(2) shall not apply; and
''(C) if the amount of such remuneration from an employer for
the taxable year is less than $100, such remuneration from that
employer shall not be included in self-employment income.''
Subsec. (b). Pub. L. 99-514, Sec. 1882(b)(1)(B)(ii), (iii),
substituted ''paragraph'' for ''clause'' in second sentence and
inserted at end ''In the case of church employee income, the
special rules of subsection (j)(2) shall apply for purposes of
paragraph (2).''
Pub. L. 99-509 struck out ''under an agreement entered into
pursuant to the provisions of section 218 of the Social Security
Act (relating to coverage of State employees), or'' after
''services included'' in second sentence.
Pub. L. 99-272 substituted ''medicare qualified government
employment (as defined in section 3121(u)(3))'' for ''medicare
qualified Federal employment (as defined in section 3121(u)(2))''.
Subsec. (c)(2)(G). Pub. L. 99-514, Sec. 1883(a)(11)(A), realigned
margin of subpar. (G).
Subsec. (e)(1). Pub. L. 99-514, Sec. 1704(a)(1), (2)(A),
substituted ''Subject to paragraph (2), any individual'' for ''Any
individual'' and inserted ''and, in the case of an individual
described in subparagraph (A), that he has informed the ordaining,
commissioning, or licensing body of the church or order that he is
opposed to such insurance''.
Subsec. (e)(2) to (4). Pub. L. 99-514, Sec. 1704(a)(2)(B), (C),
added par. (2) and redesignated former pars. (2) and (3) as (3) and
(4), respectively.
Subsec. (g)(5). Pub. L. 99-514, Sec. 1882(a), added par. (5).
Subsec. (i)(1). Pub. L. 99-514, Sec. 301(b)(12), amended par. (1)
generally. Prior to amendment, par. (1) read as follows: ''In
determining the net earnings from self-employment of any options
dealer or commodities dealer -
''(A) notwithstanding subsection (a)(3)(A), there shall not be
excluded any gain or loss (in the normal course of the taxpayer's
activity of dealing in or trading section 1256 contracts) from
section 1256 contracts or property related to such contracts, and
''(B) the deduction provided by section 1202 shall not apply.''
Subsec. (j). Pub. L. 99-514, Sec. 1882(b)(1)(A), added subsec.
(j).
1984 - Subsec. (a)(14). Pub. L. 98-369, Sec. 2603(d)(2), added
par. (14).
Subsec. (c)(1), (2)(E). Pub. L. 98-369, Sec. 2663(j)(5)(B),
substituted ''Secretary of Health and Human Services'' for
''Secretary of Health, Education, and Welfare''.
Subsec. (c)(2)(G). Pub. L. 98-369, Sec. 2603(c)(2), added subpar.
(G).
Subsec. (g)(1), (3)(A), (B). Pub. L. 98-369, Sec. 2663(j)(5)(B),
substituted ''Secretary of Health and Human Services'' for
''Secretary of Health, Education, and Welfare''.
Subsec. (i). Pub. L. 98-369, Sec. 102(c)(1), added subsec. (i).
1983 - Subsec. (a)(11). Pub. L. 98-21, Sec. 323(b)(1), struck out
''in the case of an individual described in section 911(d)(1)(B),''
before ''the exclusion''.
Subsec. (a)(12), (13). Pub. L. 98-21, Sec. 124(c)(2), added par.
(12) and redesignated former par. (12) as (13).
Subsec. (b). Pub. L. 98-21, Sec. 322(b)(2), as amended by Pub. L.
101-508, Sec. 5130(a)(2), inserted '', except as provided by an
agreement under section 233 of the Social Security Act'' in text
preceding par. (1).
Pub. L. 98-21, Sec. 321(e)(3), substituted ''employees of foreign
affiliates of American employers'' for ''employees of foreign
subsidiaries of domestic corporations'' in cl. (A) of provisions
following par. (2).
1982 - Subsec. (b). Pub. L. 97-248 struck out ''and'' before
''(B)'' and inserted '', and (C) includes, but only with respect to
the tax imposed by section 1401(b), remuneration paid for medicare
qualified Federal employment (as defined in section 3121(u)(2))
which is subject to the taxes imposed by sections 3101(b) and
3111(b)''.
1981 - Subsec. (a)(8). Pub. L. 97-34, Sec. 111(b)(3), substituted
''relating to citizens or residents of the United States living
abroad'' for ''relating to income earned by employees in certain
camps''.
Subsec. (a)(11). Pub. L. 97-34, Sec. 111(b)(5), substituted ''in
the case of an individual described in section 911(d)(1)(B), the
exclusion from gross income provided by section 911(a)(1) shall not
apply'' for ''in the case of an individual who has been a resident
of the United States during the entire taxable year, the exclusion
from gross income provided by section 911(a)(2) shall not apply''.
1978 - Subsec. (a). Pub. L. 95-615 substituted ''(relating to
income earned by employees in certain camps)'' for ''(relating to
earned income from sources without the United States)'' in par.
(8).
Pub. L. 95-600, Sec. 703(j)(8)(A), substituted ''subsection (h)''
for ''subsection (i)'' wherever appearing in last par.
Subsec. (c)(6). Pub. L. 95-600, Sec. 703(j)(8)(B), substituted
''subsection (g)'' for ''subsection (h)''.
1977 - Subsec. (a)(12). Pub. L. 95-216 added par. (12).
1976 - Subsec. (a). Pub. L. 94-455, Sec. 1901(b)(1) (I)(iii),
(X), 1906(b)(13)(A), substituted, in provisions preceding par. (1)
and in two places in cl. (iv) of provisions extending the
application of provisions relating to agricultural labor to trade
or business carried on by individuals, self-employed or in
partnership, ''section 702(a)(8)'' for ''section 702(a)(9)'' and
struck out in par. (2) ''(other than interest described in section
35)'' after ''unless such dividends and interest'' and in par. (10)
''or his delegate'' after ''Secretary''.
Subsec. (b)(1). Pub. L. 94-455, Sec. 1901(a)(155)(A), among other
changes, struck out provisions spelling out fixed Social Security
contributions and benefit base limits on wages paid during taxable
years between 1955 through 1974.
Subsec. (c)(2)(F). Pub. L. 94-455, Sec. 1207(e)(1)(B), added
subpar. (F).
Subsec. (g). Pub. L. 94-455, Sec. 1901(a)(155)(B), (C),
1906(b)(13)(A), redesignated subsec. (h) as (g), and as so
redesignated, struck out in par. (1)(A) ''or his delegate'' after
''Secretary'' and in par. (2) provisions relating to individuals
who have self-employment income for taxable years ending before
Dec. 31, 1967, on or before Dec. 31, 1968, and substituted in par.
(2) reference to for which the individual has self-employment
income (determined without regard to this subsection or subsection
(c)(6)) for reference to ending on or after Dec. 31, 1967 for which
he has self-employment income (as so determined). Former subsec.
(g), which related to treatment of certain remunerations
erroneously reported as net earnings from self-employment, was
struck out.
Subsecs. (h), (i). Pub. L. 94-455, Sec. 1901(a)(155)(B),
redesignated subsec. (i) as (h). Former subsec. (h) redesignated
(g).
1975 - Subsec. (b). Pub. L. 94-92 struck out from item B of
second sentence the limitation of ''wages'' to include
''compensation'' solely with respect to the tax imposed by section
1401(b).
1974 - Subsec. (a)(1). Pub. L. 93-368 inserted ''(as determined
without regard to any activities of an agent of such owner or
tenant)'' after ''material participation by the owner or tenant''
wherever appearing.
1973 - Subsec. (b)(1)(H). Pub. L. 93-233 substituted ''$13,200''
for ''$12,600''.
Pub. L. 93-66 substituted ''$12,600'' for ''$12,000''.
1972 - Subsec. (a)(8), (11). Pub. L. 92-603, Sec. 121(b)(1),
124(b), 140(b), in par. (8), struck out limitation under which
provisions authorizing the computation of net earnings without
regard to sections 911 and 931 were limited to citizens of the
United States performing religious service as employees of an
American employer or as ministers in a foreign country having a
congregation predominantly of citizens of the United States, added
par. (11), and extended the application of provisions relating to
agricultural labor to trade or business carried on by individuals,
self-employed or in partnership, with certain exceptions.
Subsec. (b)(1)(F). Pub. L. 92-336, Sec. 203(b)(1)(A), inserted
''and before 1973'' after ''1971''.
Subsec. (b)(1)(G) to (I). Pub. L. 92-336, Sec. 203(b)(1)(B),
added subpars. (G) to (I).
Subsec. (i). Pub. L. 92-603, Sec. 121(b)(2), added subsec. (i).
1971 - Subsec. (b)(1)(E). Pub. L. 92-5, Sec. 203(b)(1)(A),
inserted ''and beginning before 1972'' after ''1967'' and
substituted ''; and'' for ''; or''.
Subsec. (b)(1)(F). Pub. L. 92-5, Sec. 203(b)(1)(B), added subpar.
(F).
1968 - Subsec. (a)(10). Pub. L. 90-248, Sec. 118(a), added par.
(10).
Subsec. (b). Pub. L. 90-248, Sec. 502(b)(1), designated existing
provisions of second sentence respecting ''wages'' as item ''A''
and added item ''B''.
Subsec. (b)(1)(D). Pub. L. 90-248, Sec. 108(b)(1)(A), inserted
''and before 1968'' after ''1965''.
Subsec. (b)(1)(E). Pub. L. 90-248, Sec. 108(b)(1)(B), added
subpar. (E).
Subsec. (c). Pub. L. 90-248, Sec. 115(b)(1), substituted ''such
order) performed by an individual unless an exemption under
subsection (e) is effective with respect to him'' for ''such order
performed by an individual during the period for which a
certificate filed by him under subsection (e) is in effect'' in
last sentence.
Subsec. (c)(1). Pub. L. 90-248, Sec. 122(b)(1), excepted from
exclusion from definition of ''trade or business'' the functions of
a public office of a State or a political division thereof with
respect to fees received in any period in which the functions are
performed in a position compensated solely on a fee basis and in
which such functions are not covered under an agreement entered by
such State and the Secretary pursuant to section 218 of the Social
Security Act (section 418 of Title 42, The Public Health and
Welfare).
Subsec. (c)(2)(E). Pub. L. 90-248, Sec. 122(b)(2), added subpar.
(E).
Subsec. (e). Pub. L. 90-248, Sec. 115(b)(2), substituted
provisions allowing clergymen, members of religious orders who have
not taken a vow of poverty, and Christian Science practitioners to
secure an exemption from social security self-employment tax upon
meeting requirements of pars. (1) to (3) respecting such exemption,
time for filing application, and effective date of exemption for
provisions of former pars. (1) to (5) permitting such persons to
secure social security coverage by filing a waiver certificate,
prescribing time for filing certificate, effective date of
certificate treatment of certain remuneration paid in 1955 and 1956
as wages, and optional provision for certain certificates filed on
or before April 15, 1967.
Subsec. (h)(2). Pub. L. 90-248, Sec. 501(a), substituted
''December 31, 1967'' and ''December 31, 1968'' for ''December 31,
1965'' and ''April 15, 1966'', respectively, in subpar. (A) and
''December 31, 1967'' for ''December 31, 1965'' in subpar. (B) and
inserted in such subpar. (B) exception provision as to when an
application shall be deemed timely filed.
1966 - Subsec. (e)(3)(E). Pub. L. 89-368 added subpar. (E).
1965 - Subsec. (a). Pub. L. 89-97, Sec. 312(b), substituted
''2,400'' for ''$1,800'' in cls. (i) to (iv) and ''$1,600'' for
''$1,200'' in cls. (ii) and (iv) of second sentence following par.
(9), wherever appearing.
Subsec. (b)(1)(C). Pub. L. 89-97, Sec. 320(b)(1)(C), inserted
''and before 1966'' after ''1958'' and substituted ''and'' for
''or'' after the semicolon.
Subsec. (b)(1)(D). Pub. L. 89-97, Sec. 320(b)(1)(B), added
subpar. (D).
Subsec. (c). Pub. L. 89-97, Sec. 311(b)(1), (2), 319(a), struck
out from par. (5) ''doctor of medicine, or'' before and ''; or the
performance of such service by a partnership'' after ''Christian
Science practitioner,'' added par. (6), and consolidated into one
sentence former last two sentences.
Subsec. (e)(1). Pub. L. 89-97, Sec. 311(b)(3)(A), substituted
''extended to service described in subsection (c)(4) or (c)(5)
performed by him'' for ''extended to service described in
subsection (c)(4), or service described in subsection (c)(5)
insofar as it relates to the performance of service by an
individual in the exercise of his profession as a Christian Science
practitioner, as the case may be performed by him''.
Subsec. (e)(2)(A). Pub. L. 89-97, Sec. 311(b)(3)(B), substituted
''(computed without regard to subsections (c)(4) and (c)(5) of $400
or more, any part of which was derived from the performance of
service described in subsection (c)(4) or (c)(5)'' for ''(computed,
in the case of an individual referred to in paragraph (1)(A),
without regard to subsection (c)(4), and, in the case of an
individual referred to in paragraph (1)(B), without regard to
subsection (c)(5) insofar as it relates to the performance of
service by an individual in the exercise of his profession as a
Christian Science practitioner) of $400 or more, any part of which
was derived from the performance of service described in subsection
(c)(4), or from the performance of service described in subsection
(c)(5) insofar as it relates to the performance of service by an
individual in the exercise of his profession as a Christian Science
practitioner, as the case may be''.
Subsec. (e)(2)(B). Pub. L. 89-97, Sec. 341(a), substituted ''his
second taxable year ending after 1963'' for ''his second taxable
year ending after 1962''.
Subsec. (e)(3)(D). Pub. L. 89-97, Sec. 341(b), added subpar. (D).
Subsec. (e)(5). Pub. L. 89-97, Sec. 331(a), extended
applicability of section to earnings in taxable years beyond those
ending before 1960, extended until April 15, 1966, the last date
for filing a certificate by an individual and until Apr. 15, 1967,
the last date for filing a supplemental certificate by an
individual, provided for filing of the certificate on or before
Apr. 15, 1967, if the individual died on or before April 15, 1966,
and extended to Apr. 15, 1967, the date on or before which the tax
under section 1401 had been paid, or the overpayment, including
interest under section 6611, had been repaid.
Subsec. (e)(6). Pub. L. 89-97, Sec. 331(a), struck out par. (6)
which dealt with filing of certificates by fiduciaries or survivors
on or before April 15, 1962.
Subsec. (h). Pub. L. 89-97, Sec. 319(c), added subsec. (h).
1964 - Subsec. (a)(3)(B). Pub. L. 88-272 inserted reference to
iron ore.
Subsec. (e)(2)(B). Pub. L. 88-650, Sec. 2(a), substituted ''his
second taxable year ending after 1962'' for ''his second taxable
year ending after 1959''.
Subsec. (e)(3)(C). Pub. L. 88-650, Sec. 2(b), added subpar. (C).
1961 - Subsec. (e)(6). Pub. L. 87-64 added par. (6).
1960 - Subsec. (a). Pub. L. 86-778, Sec. 103(k), added par. (9)
and inserted references to paragraph (9) in cls. (v) and (vi) of
last sentence.
Subsec. (b). Pub. L. 86-778, Sec. 103(l), substituted ''the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, or American
Samoa'' for ''the Virgin Islands or a resident of Puerto Rico'' in
last sentence.
Subsec. (c)(2). Pub. L. 86-778, Sec. 106(b), excluded service
described in section 3121(b)(11), (12), or (15) performed in the
United States (as defined in section 3121(e)(2)) by a citizen of
the United States.
Subsec. (e)(2)(B). Pub. L. 86-778, Sec. 101(a), substituted
''1959'' for ''1956''.
Subsec. (e)(3). Pub. L. 86-778, Sec. 101(b), designated existing
provisions as cl. (A), struck out provisions which related to
certificates for prior taxable years which have now become
inapplicable, and added cl. (B).
Subsec. (e)(5). Pub. L. 86-778, Sec. 101(c), added par. (5).
Subsec. (g). Pub. L. 86-778, Sec. 105(c)(1), added subsec. (g).
1958 - Subsec. (b)(1). Pub. L. 85-840, Sec. 402(a), increased
limitation on self-employment income subject to tax, for taxable
years ending after 1958, from $4,200 to $4,800.
Subsec. (f). Pub. L. 85-840, Sec. 403(a), added subsec. (f).
1957 - Subsec. (a)(8). Pub. L. 85-239, Sec. 5(b), permitted
computation of net earnings without regard to sections 107 and 119
of this title.
Subsec. (e)(2). Pub. L. 85-239, Sec. 1(a), permitted a person to
file a certificate on or before the due date of the return
(including any extension thereof) for his second taxable year
ending after 1956.
Subsec. (e)(3). Pub. L. 85-239, Sec. 1(b), provided for the
effective date of certificates filed after August 30, 1957, but on
or before the due date of the return (including any extension
thereof) for the second taxable year ending after 1956, for
certificates filed on or before August 30, 1957, which are
effective only for the third or fourth taxable year ending after
1954 and all succeeding taxable years, and for certificates filed
after the due date of the return (including any extension thereof)
for the second taxable year ending after 1956.
Subsec. (e)(4). Pub. L. 85-239, Sec. 2, added par. (4).
1956 - Subsec. (a). Act Aug. 1, 1956, Sec. 201(i), amended
generally last two sentences to include those businesses in which
the income is computed under an accrual method, and partnerships,
to change the method of computation of net earnings for individuals
by permitting those whose gross income is not more than $1,800 to
deem their net earnings to be 66 2/3 percent of such gross income,
and those whose gross income is more than $1,800 and the net
earnings are less than $1,200, to deem the net earnings to be
$1,200, and to provide for the computation of net earnings for
members of partnerships.
Subsec. (a)(1). Act Aug. 1, 1956, Sec. 201(e)(2), struck out from
the exclusion income derived by an owner or tenant of land if such
income is derived under an arrangement with another individual for
the production by such other individual of agricultural or
horticultural commodities if such arrangement provides for material
participation by the owner or tenant in the production or the
management of the production of such commodities, and there is
material participation by the owner or tenant with respect to any
such commodity.
Subsec. (a)(8)(B). Act Aug. 1, 1956, Sec. 201(g), included
citizens of the United States who are ministers in foreign
countries and have congregations composed predominantly of citizens
of the United States.
Subsec. (c)(2). Act Aug. 1, 1956, Sec. 201(e)(3), included within
''trade or business'' service described in section 3121(b)(16) of
this title.
Subsec. (c)(5). Act Aug. 1, 1956, Sec. 201(f), struck out
exclusion of lawyers, dentists, osteopaths, veterinarians,
chiropractors, naturopaths, and optometrists.
1954 - Subsec. (a). Act Sept. 1, 1954, Sec. 201(a), (c)(4), in
par. (1) clarified the term rentals to indicate that it includes
rentals paid in the form of crop shares, struck out par. (2),
redesignated pars. (3) to (8) as (2) to (7), respectively, added a
new par. (8), and inserted provisions at end establishing an
optional method of reporting income for self-employed farmers.
Subsec. (b). Act Sept. 1, 1954, Sec. 201(b), increased the
limitation on self-employment income subject to tax, for taxable
years ending after 1954, from $3,600 to $4,200 and included as
''wages'', for purposes of computing ''self-employment income,''
remuneration of United States citizens employed by a foreign
subsidiary of a domestic corporation which has agreed to have the
Social Security insurance system extended to service performed by
such citizens.
Subsec. (c). Act Sept. 1, 1954, Sec. 201(c)(2), inserted two
sentences at end making the provisions of par. (4) inapplicable to
service performed during the period for which a certificate filed
under subsec. (e) is in effect.
Subsec. (c)(2). Act Sept. 1, 1954, Sec. 201(c)(1), inserted ''and
other than service described in paragraph (4) of this subsection''
after ''18''.
Subsec. (c)(5). Act Sept. 1, 1954, Sec. 201(c)(5), struck out
exclusions from self-employment tax in the case of architects,
certified public accountants, accountants registered or licensed as
accountants under State or municipal law, full-time practicing
public accountants, funeral directors and professional engineers.
Subsec. (e). Act Sept. 1, 1954, Sec. 201(c)(3), added subsec.
(e).
EFFECTIVE DATE OF 1997 AMENDMENT
Section 922(c) of Pub. L. 105-34 provided that: ''The amendments
made by this section (amending this section and section 411 of
Title 42, The Public Health and Welfare) shall apply to payments
after December 31, 1997.''
EFFECTIVE DATE OF 1996 AMENDMENT
Section 1456(b) of Pub. L. 104-188 provided that: ''The
amendments made by this section (amending this section) shall apply
to years beginning before, on, or after December 31, 1994.''
EFFECTIVE DATE OF 1994 AMENDMENT
Amendment by section 108(h)(1) of Pub. L. 103-296 effective Mar.
31, 1995, see section 110(a) of Pub. L. 103-296, set out as a note
under section 401 of Title 42, The Public Health and Welfare.
Section 319(c) of Pub. L. 103-296 provided that: ''The amendments
made by this section (amending this section, sections 3102, 3121,
and 3122 of this title, and sections 410 and 411 of Title 42, The
Public Health and Welfare) shall apply with respect to service
performed after the calendar quarter following the calendar quarter
in which the date of the enactment of this Act (Aug. 15, 1994)
occurs.''
EFFECTIVE DATE OF 1993 AMENDMENT
Section 13207(e) of Pub. L. 103-66 provided that: ''The
amendments made by this section (amending this section and sections
3121, 3122, 3125, 3231, and 6413 of this title) shall apply to 1994
and later calendar years.''
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by section 5123(a)(3) of Pub. L. 101-508 applicable
with respect to income received for services performed in taxable
years beginning after Dec. 31, 1990, see section 5123(b) of Pub. L.
101-508, set out as a note under section 403 of Title 42, The
Public Health and Welfare.
Section 5130(b) of Pub. L. 101-508 provided that: ''The
amendments made by subsection (a) (amending this section, section
3509 of this title, and sections 408, 409, and 411 of Title 42)
shall be effective as if included in the enactment of the provision
to which it relates.''
Section 11331(e) of Pub. L. 101-508 provided that: ''The
amendments made by this section (amending this section and sections
3121, 3122, 3125, 3231, and 6413 of this title) shall apply to 1991
and later calendar years.''
EFFECTIVE DATE OF 1989 AMENDMENT
Section 10204(a)(2) of Pub. L. 101-239 provided that: ''The
amendments made by paragraph (1) (amending this section) shall
apply with respect to taxable years beginning after December 31,
1989.''
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by section 3043(c)(1) of Pub. L. 100-647 applicable to
all periods beginning before, on, or after Nov. 10, 1988, with no
inference created as to existence or nonexistence or scope of any
exemption from tax for income derived from fishing rights secured
as of Mar. 17, 1988, by any treaty, law, or Executive Order, see
section 3044 of Pub. L. 100-647, set out as an Effective Date note
under section 7873 of this title.
Section 8007(d) of Pub. L. 100-647 provided that: ''The
amendments made by subsection (a) (enacting section 3127 of this
title and renumbering former section 3127 of this title as section
3128) shall apply to wages paid after December 31, 1988. The
amendments made by subsection (b) (amending section 402 of Title
42, The Public Health and Welfare) shall apply to benefits paid for
(and items and services furnished in) months after December 1988.
The amendments made by subsection (c) (amending this section) shall
apply to applications for exemptions filed on or after the date of
the enactment of this Act (Nov. 10, 1988).''
EFFECTIVE DATE OF 1987 AMENDMENT
Section 9022(c) of Pub. L. 100-203 provided that: ''The
amendments made by this section (amending this section and section
411 of Title 42, The Public Health and Welfare) shall apply with
respect to services performed in taxable years beginning on or
after January 1, 1988.''
EFFECTIVE DATE OF 1986 AMENDMENTS
Amendment by section 301(b)(12) of Pub. L. 99-514 applicable to
taxable years beginning after Dec. 31, 1986, see section 301(c) of
Pub. L. 99-514, set out as a note under section 62 of this title.
Amendment by section 1272(d)(8), (9) of Pub. L. 99-514 applicable
to taxable years beginning after Dec. 31, 1986, with certain
exceptions and qualifications, see section 1277 of Pub. L. 99-514,
set out as a note under section 931 of this title.
Section 1704(a)(3) of Pub. L. 99-514 provided that: ''The
amendments made by paragraphs (1) and (2) (amending this section)
shall apply to applications filed after December 31, 1986.''
Section 1882(b)(3) of Pub. L. 99-514 provided that: ''The
amendments made by this subsection (amending this section and
section 411 of Title 42, The Public Health and Welfare) shall apply
to remuneration paid or derived in taxable years beginning after
December 31, 1985.''
Amendment by Pub. L. 99-509 effective, except as otherwise
provided, with respect to payments due with respect to wages paid
after Dec. 31, 1986, including wages paid after such date by a
State (or political subdivision thereof) that modified its
agreement pursuant to section 418(e)(2) of Title 42, The Public
Health and Welfare, see section 9002(d) of Pub. L. 99-509, set out
as a note under section 418 of Title 42.
Amendment by Pub. L. 99-272 applicable to services performed
after Mar. 31, 1986, see section 13205(d)(1) of Pub. L. 99-272, set
out as a note under section 3121 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 102(c)(1) of Pub. L. 98-369 applicable to
taxable years beginning after July 18, 1984, except as otherwise
provided, see section 102(f)(3), (g) of Pub. L. 98-369, set out as
a note under section 1256 of this title.
Amendment by section 2603(c)(2) of Pub. L. 98-369 applicable to
service performed after Dec. 31, 1983, see section 2603(e) of Pub.
L. 98-369, set out as a note under section 410 of Title 42, The
Public Health and Welfare.
Amendment by section 2663(j)(5)(B) of Pub. L. 98-369 effective
July 18, 1984, but not to be construed as changing or affecting any
right, liability, status or interpretation which existed (under the
provisions of law involved) before that date, see section 2664(b)
of Pub. L. 98-369, set out as a note under section 401 of Title 42.
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by section 124(c)(2) of Pub. L. 98-21 applicable to
taxable years beginning after Dec. 31, 1989, see section 124(d)(2)
of Pub. L. 98-21, set out as a note under section 1401 of this
title.
Amendment by section 321(e)(3) of Pub. L. 98-21 applicable to
agreements entered into after Apr. 20, 1983, except that at the
election of any American employer such amendment shall also apply
to any agreement entered into on or before Apr. 20, 1983, see
section 321(f) of Pub. L. 98-21 set out as a note under section 406
of this title.
Amendment by section 322(b)(2) of Pub. L. 98-21 effective for
taxable years beginning on or after Apr. 20, 1983, see section
322(c) of Pub. L. 98-21 set out as a note under section 3121 of
this title.
Section 323(c)(2) of Pub. L. 98-21 provided that: ''Except as
provided in subsection (b)(2)(B) (amending section 411 of Title 42,
The Public Health and Welfare, effective with respect to taxable
years beginning after Dec. 31, 1981, and before Jan. 1, 1984), the
amendments made by subsection (b) (amending this section and
section 411 of Title 42) shall apply to taxable years beginning
after December 31, 1983.''
EFFECTIVE DATE OF 1982 AMENDMENT
Amendment by Pub. L. 97-248 applicable to remuneration paid after
Dec. 31, 1982, see section 278(c)(1) of Pub. L. 97-248, set out as
a note under section 3121 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-34 applicable with respect to taxable
years beginning after Dec. 31, 1981, see section 115 of Pub. L.
97-34, set out as a note under section 911 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by Pub. L. 95-600 effective Oct. 4, 1976, see section
703(r) of Pub. L. 95-600, set out as a note under section 46 of
this title.
EFFECTIVE DATE OF 1978 AMENDMENT; ELECTION OF PRIOR LAW
Amendment by Pub. L. 95-615 applicable to taxable years beginning
after Dec. 31, 1977, with provision for election of prior law, see
section 209 of Pub. L. 95-615, set out as an Effective Date of 1978
Amendment note under section 911 of this title.
EFFECTIVE DATE OF 1977 AMENDMENT
Amendment by Pub. L. 95-216 applicable with respect to taxable
years beginning after Dec. 31, 1977, see section 313(c) of Pub. L.
95-216, set out as a note under section 411 of Title 42, The Public
Health and Welfare.
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1207(e)(1)(B) of Pub. L. 94-455 applicable
to taxable years ending after Dec. 31, 1971, see section 1207(f)(4)
of Pub. L. 94-455, set out as a note under section 3121 of this
title.
Amendment by section 1901(a)(155), (b)(1)(I)(iii), (X) of Pub. L.
94-455 effective for taxable years beginning after Dec. 31, 1976,
see section 1901(d) of Pub. L. 94-455, set out as a note under
section 2 of this title.
EFFECTIVE DATE OF 1975 AMENDMENT
Section 203(c) of Pub. L. 94-92 provided that: ''The amendments
made by this section (amending this section and section 3231 of
this title) shall be effective January 1, 1975, and shall apply
only with respect to compensation paid for services rendered on or
after that date.''
EFFECTIVE DATE OF 1974 AMENDMENT
Amendment by Pub. L. 93-368 applicable with respect to taxable
years beginning after Dec. 31, 1973, see section 10(c) of Pub. L.
93-368, set out as a note under section 411 of Title 42, The Public
Health and Welfare.
EFFECTIVE DATE OF 1973 AMENDMENTS
Amendment by Pub. L. 93-233 applicable only with respect to
remuneration paid after, and taxable years beginning after, 1973,
see section 5(e) of Pub. L. 93-233, set out as a note under section
409 of Title 42, The Public Health and Welfare.
Amendment by Pub. L. 93-66 applicable only with respect to
remuneration paid after, and taxable years beginning after, 1973,
see section 203(e) of Pub. L. 93-66, set out as a note under
section 409 of Title 42.
EFFECTIVE DATE OF 1972 AMENDMENTS
Amendment by Pub. L. 92-603 applicable with respect to taxable
years beginning after Dec. 31, 1972, see sections 121(c), 124(c),
and 140(c) of Pub. L. 92-603, set out as notes under section 411 of
Title 42, The Public Health and Welfare.
Amendment by Pub. L. 92-336 applicable only with respect to
taxable years beginning after 1972, see section 203(c) of Pub. L.
92-336, set out as a note under section 409 of Title 42.
EFFECTIVE DATE OF 1971 AMENDMENT
Amendment by Pub. L. 92-5 applicable only with respect to taxable
years beginning after 1971, see section 203(c) of Pub. L. 92-5, set
out as a note under section 409 of Title 42, The Public Health and
Welfare.
EFFECTIVE DATE OF 1968 AMENDMENT
Amendment by section 108(b)(1) of Pub. L. 90-248 applicable only
with respect to taxable years ending after 1967, see section 108(c)
of Pub. L. 90-248, set out as a note under section 409 of Title 42,
The Public Health and Welfare.
Section 115(c) of Pub. L. 90-248 provided that: ''The amendments
made by subsections (a) and (b) (amending this section and section
411 of Title 42) shall apply only with respect to taxable years
ending after 1967.''
Section 118(c) of Pub. L. 90-248 provided that: ''The amendments
made by this section (amending this section and section 411 of
Title 42) shall apply only with respect to taxable years ending on
or after December 31, 1967.''
Section 122(c) of Pub. L. 90-248 provided that:
''(1) The amendments made by subsections (a) and (b) of this
section (amending this section and section 411 of Title 42) shall
apply with respect to fees received after 1967.
''(2) Notwithstanding the provisions of subsections (a) and (b)
of this section (amending this section and section 411 of Title
42), any individual who in 1968 is in a position to which the
amendments made by such subsections apply may make an irrevocable
election not to have such amendments apply to the fees he receives
in 1968 and every year thereafter, if on or before the due date of
his income tax return for 1968 (including any extensions thereof)
he files with the Secretary of the Treasury or his delegate, in
such manner as the Secretary of the Treasury or his delegate shall
by regulations prescribe, a certificate of election of exemption
from such amendments.''
Section 501(b) of Pub. L. 90-248, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendment made by subsection (a) (amending this section) shall
apply with respect to taxable years beginning after December 31,
1950. For such purpose, chapter 2 of the Internal Revenue Code of
1986 (formerly I.R.C. 1954) shall be treated as applying to all
taxable years beginning after such date.''
Section 502(b)(2) of Pub. L. 90-248 provided that: ''The
amendments made by paragraph (1) (amending this section) shall be
effective only with respect to taxable years ending on or after
December 31, 1968.''
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-368 applicable with respect to taxable
years beginning after December 31, 1966, see section 102(d) of Pub.
L. 89-368, set out as a note under section 6654 of this title.
EFFECTIVE DATE OF 1965 AMENDMENT
Amendment by section 311(b)(1)-(3) of Pub. L. 89-97 applicable
only with respect to taxable years ending on or after Dec. 31,
1965, see section 311(c) of Pub. L. 89-97, set out as a note under
section 410 of Title 42, The Public Health and Welfare.
Amendment by section 312(b) of Pub. L. 89-97 applicable only with
respect to taxable years beginning after Dec. 31, 1965, see section
312(c) of Pub. L. 89-97, set out as a note under section 411 of
Title 42.
Section 319(e) of Pub. L. 89-97, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendments made by this section (amending this section and sections
402 and 411 of Title 42) shall apply with respect to taxable years
beginning after December 31, 1950. For such purpose, chapter 2 of
the Internal Revenue Code of 1986 (formerly I.R.C. 1954) shall be
treated as applying to all taxable years beginning after such
date.''
Amendment by section 320(b)(1) of Pub. L. 89-97 applicable with
respect to taxable years ending after 1965, see section 320(c) of
Pub. L. 89-97, set out as a note under section 3121 of this title.
Section 331(d) of Pub. L. 89-97, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendments made by this section (amending this section) shall be
applicable (except as otherwise specifically provided therein) only
to certificates with respect to which supplemental certificates are
filed pursuant to section 1402(e)(5)(A) of such Code after the date
of the enactment of this Act (July 30, 1965), and to certificates
filed pursuant to section 1402(e)(5)(B) after such date; except
that no monthly benefits under title II of the Social Security Act
(section 401 et seq. of Title 42) for the month in which this Act
is enacted (July 1965) or any prior month shall be payable or
increased by reason of such amendments, and no lump sum death
payment under such title (section 401 et seq. of Title 42) shall be
payable or increased by reason of such amendments in the case of
any individual who died prior to the date of the enactment of this
Act (July 30, 1965). The provisions of section 1402(e)(5) and (6)
of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) which
were in effect before the date of enactment of this Act shall be
applicable with respect to any certificate filed pursuant thereto
before such date if a supplemental certificate is not filed with
respect to such certificate as provided in this section.''
Section 341(c) of Pub. L. 89-97, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendments made by subsections (a) and (b) (amending this section)
shall be applicable only with respect to certificates filed
pursuant to section 1402(e) of the Internal Revenue Code of 1986
(formerly I.R.C. 1954) after the date of the enactment of this Act
(July 30, 1965); except that no monthly benefits under title II of
the Social Security Act (section 401 et seq. of Title 42) for the
month in which this Act is enacted (July 1965) or any prior month
shall be payable or increased by reason of such amendments.''
EFFECTIVE DATE OF 1964 AMENDMENTS
Section 2(c) of Pub. L. 88-650, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendments made by subsections (a) and (b) (amending this section)
shall be applicable only with respect to certificates filed
pursuant to section 1402(e) of the Internal Revenue Code of 1986
(formerly I.R.C. 1954) after the date of the enactment of this Act
(Oct. 13, 1964); except that no monthly benefits under title II of
the Social Security Act (section 401 et seq. of Title 42, The
Public Health and Welfare) for the month in which this Act (Oct.
1964) is enacted or any prior month shall be payable or increased
by reason of such amendments.''
Amendment by Pub. L. 88-272 applicable with respect to amounts
received or accrued in taxable years beginning after Dec. 31, 1963,
attributable to iron ore mined in such years, see section 227(c) of
Pub. L. 88-272, set out as a note under section 272 of this title.
EFFECTIVE DATE OF 1961 AMENDMENT
Section 202(b) of Pub. L. 87-64 provided that: ''The amendment
made by subsection (a) (amending this section) shall take effect on
the date of enactment of this Act (June 30, 1961); except that no
monthly benefits under title II of the Social Security Act (section
401 et seq. of Title 42, The Public Health and Welfare) for the
month in which this Act is enacted or any prior month shall be
payable or increased by reason of such amendment, and no lump-sum
death payment under such title shall be payable or increased by
reason of such amendment in the case of any individual who died
prior to the date of enactment of this Act (June 30, 1961).''
EFFECTIVE DATE OF 1960 AMENDMENT
Section 101(f) of Pub. L. 86-778, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''The
amendments made by this section (amending this section) shall be
applicable (except as otherwise specifically indicated therein)
only with respect to certificates (and supplemental certificates)
filed pursuant to section 1402(e) of the Internal Revenue Code of
1986 (formerly I.R.C. 1954) after the date of the enactment of this
Act (Sept. 13, 1960); except that no monthly benefits under title
II of the Social Security Act (section 401 et seq. of Title 42, The
Public Health and Welfare) for the month in which this Act is
enacted or any prior month shall be payable or increased by reason
of such amendments, and no lump-sum death payment under such title
shall be payable or increased by reason of such amendments in the
case of any individual who died prior to the date of the enactment
of this Act (Sept. 13, 1960).''
Amendment by section 103(k) of Pub. L. 86-778 applicable only in
the case of taxable years beginning after 1960, except that,
insofar as such enactment involves the nonapplication of section
932 of this title to the Virgin Islands for purposes of section
1401 et seq. of this title and section 411 of Title 42, such
enactment shall be effective in the case of all taxable years with
respect to which such chapter 2 (and corresponding provisions of
prior law) and section 411 of Title 42 are applicable, see section
103(v)(1) of Pub. L. 86-778, set out as a note under section 402 of
Title 42.
Amendment by section 103(l) of Pub. L. 86-778 applicable only in
the case of taxable years beginning after 1960, see section
103(v)(1) of Pub. L. 86-778, set out as a note under section 402 of
Title 42.
Amendment by section 106(b) of Pub. L. 86-778 applicable only
with respect to taxable years ending on or after Dec. 31, 1960, see
section 106(c) of Pub. L. 86-778, set out as a note under section
411 of Title 42.
EFFECTIVE DATE OF 1958 AMENDMENT
Section 403(b) of Pub. L. 85-840, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(1) Except as provided in paragraph (2), the amendment made by
subsection (a) (amending this section) shall apply only with
respect to individuals who die after the date of the enactment of
this Act (Aug. 28, 1958).
''(2) In the case of an individual who died after 1955 and on or
before the date of the enactment of this Act (Aug. 28, 1958), the
amendment made by subsection (a) (amending this section) shall
apply only if -
''(A) before January 1, 1960, there is filed a return (or
amended return) of the tax imposed by chapter 2 of the Internal
Revenue Code of 1986 (formerly I.R.C. 1954) (section 1401 et seq.
of this title) for the taxable year ending as a result of his
death, and
''(B) in any case where the return is filed solely for the
purpose of reporting net earnings from self-employment resulting
from the amendment made by subsection (a), the return is
accompanied by the amount of tax attributable to such net
earnings.
In any case described in the preceding sentence, no interest or
penalty shall be assessed or collected on the amount of any tax due
under chapter 2 of such Code solely by reason of the operation of
section 1402(f) of such Code.''
EFFECTIVE DATE OF 1957 AMENDMENT
Section 4 of Pub. L. 85-239, as amended by Pub. L. 99-514, Sec.
2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(a) Section 3 (set out below), and the amendments made by the
first section of this Act (amending this section), shall apply with
respect to monthly insurance benefits under title II of the Social
Security Act (section 401 et seq. of Title 42, The Public Health
and Welfare), for months beginning after, and lump sum death
payments under such title in the case of deaths occurring after,
the date of the enactment of this Act (Aug. 30, 1957).
''(b) Notwithstanding subsection (a), in the case of any
individual who -
''(1)(A) has remuneration which is deemed, by reason of section
3, to constitute remuneration for employment for purposes of
title II of the Social Security Act (section 401 et seq. of Title
42), or
''(B) has income which constitutes net earnings from
self-employment under such title by reason of the filing of a
certificate pursuant to section 1402(e)(3)(A) or (B) of the
Internal Revenue Code of 1986 (formerly I.R.C. 1954), and
''(2) was entitled to monthly insurance benefits under title II
of the Social Security Act (section 401 et seq. of Title 42) for
the month in which this Act is enacted (August 1957),
section 3 (set out below) and the amendments made by the first
section of this Act (amending this section) shall apply with
respect to monthly insurance benefits under such title based on his
wages and self-employment income only if he, or any other person
entitled to monthly insurance benefits under such title on the
basis of such wages and self-employment income, files, on or after
the date of enactment of this Act (Aug. 30, 1957), an application
for recomputation by reason of this Act. Such recomputation shall
be made in the manner provided in title II of the Social Security
Acts (section 401 et seq. of Title 42) as in effect at the time of
the last previous computation or recomputation of such individual's
primary insurance amount and as though the application therefor was
filed in the month in which the application for such last previous
computation or recomputation was filed. No recomputation under
this subsection shall be regarded as a recomputation under section
215(f) of the Social Security Act (section 415(f) of Title 42). Any
such recomputation shall be effective for and after the twelfth
month before the month in which the application therefor is filed,
but in no case for any month which begins on or prior to the date
of the enactment of this Act. Any such recomputation shall be
effective only if it results in a higher primary insurance amount.
''(c) The preceding provisions of this section shall not render
erroneous any monthly insurance benefits under title II of the
Social Security Act (section 401 et seq. of Title 42) for the month
in which this Act (August 1957) is enacted or any prior month.''
Section 5(c) of Pub. L. 85-239 provided that: ''The amendments
made by this section (amending this section and section 411 of
Title 42) shall, except for purposes of section 203 of the Social
Security Act (section 403 of title 42), apply only with respect to
taxable years ending on or after December 31, 1957. For purposes of
section 203 of the Social Security Act (section 403 of Title 42)
(other than subsection (a)), such amendments shall apply only with
respect to taxable years beginning after the month in which this
Act is enacted (August 1957). For purposes of subsection (a) of
such section 203, such amendments shall apply only with respect to
taxable years of the insured individual ending on or after December
31, 1957.''
EFFECTIVE DATE OF 1956 AMENDMENT
Amendment by section 201(e)(2), (f) of act Aug. 1, 1956,
applicable with respect to taxable years ending after 1955,
amendment by section 201(i) of that act applicable with respect to
taxable years ending on or after Dec. 31, 1956, amendment by
section 201(e)(3) of that act applicable with respect to taxable
years ending after 1954, and, except as provided in section
201(m)(2)(B) of that act, amendment by section 201(g) of that act
applicable only with respect to taxable years ending after 1956,
see section 201(m) of act Aug. 1, 1956, set out as a under section
3121 of this title.
EFFECTIVE DATE OF 1954 AMENDMENT
Section 201(d) of act Sept. 1, 1954, provided that: ''The
amendments made by subsections (a), (b) and (c) of this section
(amending this section) shall be applicable only with respect to
taxable years ending after 1954.''
REVOCATION BY MEMBERS OF THE CLERGY OF EXEMPTION FROM SOCIAL
SECURITY COVERAGE
Pub. L. 106-170, title IV, Sec. 403, Dec. 17, 1999, 113 Stat.
1910, provided that:
''(a) In General. - Notwithstanding section 1402(e)(4) of the
Internal Revenue Code of 1986, any exemption which has been
received under section 1402(e)(1) of such Code by a duly ordained,
commissioned, or licensed minister of a church, a member of a
religious order, or a Christian Science practitioner, and which is
effective for the taxable year in which this Act is enacted
(enacted Dec. 17, 1999), may be revoked by filing an application
therefor (in such form and manner, and with such official, as may
be prescribed by the Commissioner of Internal Revenue), if such
application is filed no later than the due date of the Federal
income tax return (including any extension thereof) for the
applicant's second taxable year beginning after December 31, 1999.
Any such revocation shall be effective (for purposes of chapter 2
of the Internal Revenue Code of 1986 and title II of the Social
Security Act (42 U.S.C. 401 et seq.)), as specified in the
application, either with respect to the applicant's first taxable
year beginning after December 31, 1999, or with respect to the
applicant's second taxable year beginning after such date, and for
all succeeding taxable years; and the applicant for any such
revocation may not thereafter again file application for an
exemption under such section 1402(e)(1). If the application is
filed after the due date of the applicant's Federal income tax
return for a taxable year and is effective with respect to that
taxable year, it shall include or be accompanied by payment in full
of an amount equal to the total of the taxes that would have been
imposed by section 1401 of the Internal Revenue Code of 1986 with
respect to all of the applicant's income derived in that taxable
year which would have constituted net earnings from self-employment
for purposes of chapter 2 of such Code (notwithstanding paragraphs
(4) and (5) of section 1402(c)) except for the exemption under
section 1402(e)(1) of such Code.
''(b) Effective Date. - Subsection (a) shall apply with respect
to service performed (to the extent specified in such subsection)
in taxable years beginning after December 31, 1999, and with
respect to monthly insurance benefits payable under title II on the
basis of the wages and self-employment income of any individual for
months in or after the calendar year in which such individual's
application for revocation (as described in such subsection) is
effective (and lump-sum death payments payable under such title on
the basis of such wages and self-employment income in the case of
deaths occurring in or after such calendar year).''
LIMITED EXEMPTION FOR CANADIAN MINISTERS FROM CERTAIN
SELF-EMPLOYMENT TAX LIABILITY
Section 306 of Pub. L. 103-296 provided that:
''(a) In General. - Notwithstanding any other provision of law,
if -
''(1) an individual performed services described in section
1402(c)(4) of the Internal Revenue Code of 1986 which are subject
to tax under section 1401 of such Code,
''(2) such services were performed in Canada at a time when no
agreement between the United States and Canada pursuant to
section 233 of the Social Security Act (42 U.S.C. 433) was in
effect, and
''(3) such individual was required to pay contributions on the
earnings from such services under the social insurance system of
Canada,
then such individual may file a certificate under this section in
such form and manner, and with such official, as may be prescribed
in regulations issued under chapter 2 of such Code. Upon the filing
of such certificate, notwithstanding any judgment which has been
entered to the contrary, such individual shall be exempt from
payment of such tax with respect to services described in
paragraphs (1) and (2) and from any penalties or interest for
failure to pay such tax or to file a self-employment tax return as
required under section 6017 of such Code.
''(b) Period for Filing. - A certificate referred to in
subsection (a) may be filed only during the 180-day period
commencing with the date on which the regulations referred to in
subsection (a) are issued.
''(c) Taxable Years Affected by Certificate. - A certificate
referred to in subsection (a) shall be effective for taxable years
ending after December 31, 1978, and before January 1, 1985.
''(d) Restriction on Crediting of Exempt Self-Employment Income.
- In any case in which an individual is exempt under this section
from paying a tax imposed under section 1401 of the Internal
Revenue Code of 1986, any income on which such tax would have been
imposed but for such exemption shall not constitute self-employment
income under section 211(b) of the Social Security Act (42 U.S.C.
411(b)), and, if such individual's primary insurance amount has
been determined under section 215 of such Act (42 U.S.C. 415),
notwithstanding section 215(f)(1) of such Act, the Secretary of
Health and Human Services (prior to March 31, 1995) or the
Commissioner of Social Security (after March 30, 1995) shall
recompute such primary insurance amount so as to take into account
the provisions of this subsection. The recomputation under this
subsection shall be effective with respect to benefits for months
following approval of the certificate of exemption.''
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177) or title
XVIII (Sec. 1800-1899A) of Pub. L. 99-514 require an amendment to
any plan, such plan amendment shall not be required to be made
before the first plan year beginning on or after Jan. 1, 1989, see
section 1140 of Pub. L. 99-514, as amended, set out as a note under
section 401 of this title.
REVOCATION OF EXEMPTION FROM COVERAGE BY CLERGYMEN; PROCEDURE,
APPLICABILITY, ETC.
Section 1704(b) of Pub. L. 99-514 provided that:
''(1) In general. - Notwithstanding section 1402(e)(3) of the
Internal Revenue Code of 1986, as redesignated by subsection
(a)(2)(B) of this section, any exemption which has been received
under section 1402(e)(1) of such Code by a duly ordained,
commissioned, or licensed minister of a church, a member of a
religious order, or a Christian Science practitioner, and which is
effective for the taxable year in which this Act is enacted
(enacted Oct. 22, 1986), may be revoked by filing an application
therefor (in such form and manner, and with such official, as may
be prescribed in regulations made under chapter 2 of subtitle A of
such Code), if such application is filed -
''(A) before the applicant becomes entitled to benefits under
section 202(a) or 223 of the Social Security Act (42 U.S.C.
402(a), 423) (without regard to section 202(j)(1) or 223(b) of
such Act (42 U.S.C. 402(j)(1), 423(b))), and
''(B) no later than the due date of the Federal income tax
return (including any extension thereof) for the applicant's
first taxable year beginning after the date of the enactment of
this Act (Oct. 22, 1986).
Any such revocation shall be effective (for purposes of chapter 2
of subtitle A of the Internal Revenue Code of 1986 and title II of
the Social Security Act (42 U.S.C. 401 et seq.)), as specified in
the application, either with respect to the applicant's first
taxable year ending on or after the date of the enactment of this
Act (Oct. 22, 1986) or with respect to the applicant's first
taxable year beginning after such date, and for all succeeding
taxable years; and the applicant for any such revocation may not
thereafter again file application for an exemption under such
section 1402(e)(1). If the application is filed on or after the due
date of the Federal income tax return for the applicant's first
taxable year ending on or after the date of the enactment of this
Act (Oct. 22, 1986) and is effective with respect to that taxable
year, it shall include or be accompanied by payment in full of an
amount equal to the total of the taxes that would have been imposed
by section 1401 of the Internal Revenue Code of 1986 with respect
to all of the applicant's income derived in that taxable year which
would have constituted net earnings from self-employment for
purposes of chapter 2 of subtitle A of such Code (notwithstanding
paragraph (4) or (5) of section 1402(c) of such Code) but for the
exemption under section 1402(e)(1) of such Code.
''(2) Effective date. - Paragraph (1) of this subsection shall
apply with respect to service performed (to the extent specified in
such paragraph) in taxable years ending on or after the date of the
enactment of this Act (Oct. 22, 1986) and with respect to monthly
insurance benefits payable under title II of the Social Security
Act (42 U.S.C. 401 et seq.) on the basis of the wages and
self-employment income of any individual for months in or after the
calendar year in which such individual's application for revocation
(as described in such paragraph) is effective (and lump-sum death
payments payable under such title on the basis of such wages and
self-employment income in the case of deaths occurring in or after
such calendar year).''
Section 316 of Pub. L. 95-216, as amended by Pub. L. 99-514, Sec.
2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(a) Notwithstanding section 1402(e)(3) of the Internal Revenue
Code of 1986 (formerly I.R.C. 1954), any exemption which has been
received under section 1402(e)(1) of such Code, by a duly ordained,
commissioned, or licensed minister of a church or a Christian
Science practitioner, and which is effective for the taxable year
in which this Act (Pub. L. 95-216, enacted Dec. 20, 1977) is
enacted, may be revoked by filing an application therefor (in such
form and manner, and with such official, as may be prescribed in
regulations made under chapter 2 of such Code (this chapter)), if
such application is filed -
''(1) before the applicant becomes entitled to benefits under
section 202(a) or 223 of the Social Security Act (section 402(a)
or 423 of Title 42, The Public Health and Welfare) (without
regard to section 202(j)(1) or 223(b) of such Act (section
402(j)(1) or 423(b) of Title 42)), and
''(2) no later than the due date of the Federal income tax
return (including any extension thereof) for the applicant's
first taxable year beginning after the date of the enactment of
this Act (Dec. 20, 1977).
Any such revocation shall be effective (for purposes of chapter 2
of the Internal Revenue Code of 1986 (this chapter) and title II of
the Social Security Act (section 401 et seq. of Title 42)), as
specified in the application, either with respect to the
applicant's first taxable year ending on or after the date of the
enactment of this Act (Dec. 20, 1977) or with respect to the
applicant's first taxable year beginning after such date, and for
all succeeding taxable years; and the applicant for any such
revocation may not thereafter again file application for an
exemption under such section 1402(e)(1). If the application is
filed on or after the due date of the applicant's first taxable
year ending on or after the date of the enactment of this Act (Dec.
20, 1977) and is effective with respect to that taxable year, it
shall include or be accompanied by payment in full of an amount
equal to the total of the taxes that would have been imposed by
section 1401 of the Internal Revenue Code of 1986 with respect to
all of the applicant's income derived in that taxable year which
would have constituted net earnings from self-employment for
purposes of chapter 2 of such Code (this chapter) (notwithstanding
section 1402(c)(4) or (c)(5) of such Code) except for the exemption
under section 1402(e)(1) of such Code.
''(b) Subsection (a) shall apply with respect to service
performed (to the extent specified in such subsection) in taxable
years ending on or after the date of the enactment of this Act
(Dec. 20, 1977), and with respect to monthly insurance benefits
payable under title II of the Social Security Act (section 401 et
seq. of Title 42) on the basis of the wages and self-employment
income of any individual for months in or after the calendar year
in which such individual's application for revocation (as described
in such subsection) is filed (and lump-sum death payments payable
under such title on the basis of such wages and self-employment
income in the case of deaths occurring in or after such calendar
year).''
ELECTION OF EXEMPTION OF FEES FROM COVERAGES SELF-EMPLOYMENT INCOME
Section 122(c)(2) of Pub. L. 90-248 authorized any individual
affected by the amendments made by Pub. L. 90-248 to subsecs.
(c)(1), (2)(E) of this section and section 411(c)(1), (2)(E) of
Title 42, The Public Health and Welfare, to make an irrevocable
election not to have such amendments apply to fees received in 1968
and every year thereafter if he filed, on or before the due date of
his income tax return for 1968, with the Secretary of the Treasury,
a certificate of election of exemption from such amendments.
TIME FOR CLAIM FOR REFUND OR CREDIT OF OVERPAYMENT; DISALLOWANCE OF
INTEREST
Section 501(c) of Pub. L. 90-248 authorized the payment of a
refund or credit of any overpayment resulting from the amendment of
subsec. (h)(2), relating to the filing of applications under this
section, by section 501(a) of Pub. L. 90-248 if the claim therefore
was filed on or before Dec. 31, 1968.
REFUND OR CREDIT ON CLAIMS FOR OVERPAYMENT FILED BEFORE APRIL 15,
1966, BY MEMBERS OF RELIGIOUS GROUPS OPPOSED TO INSURANCE
Section 319(f) of Pub. L. 89-97 authorized the payment of a
refund or credit of any overpayment resulting from the amendments
made to sections 402, 411, and 1402 of this title by Pub. L. 89-97,
if the claim therefore is filed on or before Apr. 15, 1966.
COMPUTATION OF INTEREST OR ASSESSMENT OF PENALTIES ON
SELF-EMPLOYMENT TAXES PAYABLE BY MINISTERS, MEMBERS OF RELIGIOUS
ORDERS, AND CHRISTIAN SCIENCE PRACTITIONERS
Section 331(b) of Pub. L. 89-97 established, for purposes of
computing interest, Apr. 15, 1967, as the due date for the payment,
under section 1401 of this title, of taxes due for any taxable year
ending before Jan. 1, 1966 solely by reason of the filing of a
certificate or supplementary certificate under subsec. (e)(5) of
this section, which was struck out by section 115(b)(2) of Pub. L.
90-248.
COMPUTATION OF INTEREST OR ASSESSMENT OF PENALTIES ON
SELF-EMPLOYMENT TAXES PAYABLE BY MINISTERS, MEMBERS OF RELIGIOUS
ORDERS, AND CHRISTIAN SCIENCE PRACTITIONERS
Section 101(d) of Pub. L. 86-778 established, for purposes of
computing interest, Apr. 15, 1962, as the due date for the payment,
under section 1401 of this title, of taxes due for any taxable year
ending before 1959 solely by reason of the filing of a certificate
or supplementary certificate under subsec. (e)(3)(B) or (5) of this
section.
Section 1(c) of Pub. L. 85-239 established the due date, for
purposes of computing interest, for the payment of taxes, where a
certificate had been filed under subsec. (e)(3)(A) or (B) of this
section after the due date of a return for any taxable year.
REMUNERATION DEEMED NET EARNINGS FROM SELF-EMPLOYMENT AND NOT
REMUNERATION FOR EMPLOYMENT
Section 105(c)(2) of Pub. L. 86-778, as amended by Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''Remuneration which is deemed under section 1402(g) of the
Internal Revenue Code of 1986 (formerly I.R.C. 1954) to constitute
net earnings from self-employment and not remuneration for
employment shall also be deemed, for purposes of title II of the
Social Security Act (section 401 et seq. of Title 42, The Public
Health and Welfare), to constitute net earnings from
self-employment and not remuneration for employment. If, pursuant
to the last sentence of section 1402(g) of the Internal Revenue
Code of 1986, an individual is deemed to have become an employee of
an organization (or to have become a member of a group) on the
first day of a calendar quarter, such individual shall likewise be
deemed, for purposes of clause (ii) or (iii) of section
210(a)(8)(B) of the Social Security Act (section 410(a)(18)(B)(ii),
(iii) of Title 42), to have become an employee of such organization
(or to have become a member of such group) on such day.''
REMUNERATION PAID TO MINISTERS, MEMBERS OF RELIGIOUS ORDERS, AND
CHRISTIAN SCIENCE PRACTITIONERS IN 1955 AND 1956 DEEMED
REMUNERATION FOR EMPLOYMENT FOR PURPOSES OF SOCIAL SECURITY
BENEFITS
Section 3 of Pub. L. 85-239, as amended by Pub. L. 99-514, Sec.
2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''Remuneration
which is deemed under section 1402(e)(4) of the Internal Revenue
Code of 1986 (formerly I.R.C. 1954) to constitute remuneration for
employment shall also be deemed, notwithstanding sections
210(a)(8)(A) and 211(c) of the Social Security Act (sections
410(a)(8)(A) and 411(c) of Title 42, The Public Health and
Welfare), to constitute remuneration for employment (and not net
earnings from self-employment) for purposes of title II of such Act
(section 401 et seq. of Title 42).'' See section 4 of Pub. L.
85-239, set out as an Effective Date of 1957 Amendment note above.
MONTHLY BENEFITS AND LUMP-SUM DEATH PAYMENTS UNDER SOCIAL SECURITY
ACT
Section 105(d)(2) of Pub. L. 86-778, set out as an Effective Date
of 1960 Amendment note under section 3121 of this title, provided
that no monthly benefits under title II of the Social Security Act
(section 401 et seq. of Title 42, The Public Health and Welfare),
for September 1960 or any prior month shall be payable or increased
by reason of the provisions of subsections (b) and (c) of section
105 or the amendments made by such subsections (adding subsec. (g)
to this section and enacting notes under this section and section
3121 of this title), and no lump-sum death payment under title II
of the Social Security Act shall be payable or increased by reason
of such provisions or amendments in the case of any individual who
died prior to Sept. 13, 1960.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 32, 162, 219, 401, 408,
475, 879, 981, 2032A, 3121, 3127, 6103, 6521, 6654 of this title;
title 42 sections 401, 402, 411, 430.
