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NOTES:

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(Aug. 16, 1954, ch. 736, 68A Stat. 434; Aug. 31, 1954, ch. 1164, pt. II, § 206(b), ; , § 2(b), Sept. 29, 1965, ; , § 1, Oct. 22, 1968, ; , title II, § 203(b), Aug. 9, 1975, ; , title II, §§ 204–206, Aug. 9, 1975, ; , title XIX, §§ 1903(a)(10), 1906 (b)(13)(A), Oct. 4, 1976, , 1834; , § 4(b), Oct. 18, 1976, ; , § 2(a)(2)(G), Oct. 17, 1978, ; , title VII, §§ 741(d)(2), –(c), Aug. 13, 1981, , 348; , § 3(c), Dec. 29, 1981, ; , title II, § 225(a)(1), (3), (b), (c)(1)(C), (6)–(8), Aug. 12, 1983, , 425; , div. A, title V, § 531(d)(2), July 18, 1984, ; , § 1(f), Oct. 31, 1984, ; , § 1(c), Oct. 31, 1984, ; , title I, § 122(e)(2), title XVIII, § 1899A(41), Oct. 22, 1986, , 2960; , title I, §§ 1001(d)(2)(C)(ii), 1011B (a)(22)(B), Nov. 10, 1988, , 3486; , title II, § 203(a)(2), Nov. 8, 1989, ; , title X, §§ 10205(a), 10206 (a), (b), 10207 (a), (b), Dec. 19, 1989, ; , title XI, §§ 11331(c), 11704 (a)(19), Nov. 5, 1990, , 1388–519; , title XIII, § 13207(c), Aug. 10, 1993, ; , title III, § 320(a)(1)(D), Aug. 15, 1994, ; , title III, § 304(d), Dec. 29, 1995, ; , title III, § 301(c)(2)(A), Aug. 21, 1996, ; , § 1(a)(7) [title II, § 202(b)(5)], Dec. 21, 2000, , 2763A–629; , title II, § 204(e)(3), (4), Dec. 21, 2001, ; , title XII, § 1201(d)(2)(A), Dec. 8, 2003, .)

References in Text
The Railway Labor Act, referred to in subsecs. (a) and (c), is act May 20, 1926, ch. 347, , as amended, which is classified principally to chapter 8 (§ 151 et seq.) of Title 45, Railroads. For complete classification of this Act to the Code, see section of Title and Tables. Sections 1 and 6 of the Railroad Retirement Act of 1937, referred to in subsecs. (b) and (d)(7), were classified to sections and of Title . The subject matter of sections 228a and 228f is covered by sections and of Title . Section 230 of the Social Security Act, referred to in subsec. (e)(2)(B), is classified to section of Title , The Public Health and Welfare. Section 3(a), (f)(3), (j) of the Railroad Retirement Act of 1974, referred to in subsec. (e)(2)(B)(ii)(II), is classified to section , (f)(3), (j) of Title , Railroads. The Railroad Retirement Act of 1974, referred to in subsec. (e)(4)(A)(ii), is act Aug. 29, 1935, ch. 812, as amended generally by , title I, § 101, Oct. 16, 1974, , which is classified generally to subchapter IV (§ 231 et seq.) of chapter of Title . For further details and complete classification of this Act to the Code, see Codification note set out preceding section 231 of Title , section of Title 45, and Tables. Section 101(a)(15) of the Immigration and Nationality Act, referred to in subsec. (e)(1), is classified to section of Title , Aliens and Nationality. Section 2(a) of the Railroad Unemployment Insurance Act, referred to in subsec. (e)(4)(B), is classified to section of Title , Railroads.

Amendments
2003—Subsec. (e)(11). added par. (11). 2001—Subsec. (e)(2)(A)(iii)(II). , § 204(e)(3), substituted “3211(a)” for “3211(a)(1)”. Subsec. (e)(2)(B)(ii)(I). , § 204(e)(4), substituted “3211(b)” for “3211(a)(2)”. Subsec. (e)(4)(A). , § 204(e)(3), substituted “3211(a)” for “3211(a)(1)”. 2000—Subsec. (e)(10). substituted “Archer MSA” for “Medical savings account” in heading. 1996—Subsec. (e)(10). added par. (10). 1995—Subsec. (a). , § 304(d)(1), substituted “Surface Transportation Board” for “Interstate Commerce Commission”. Subsec. (g). , § 304(d)(2), substituted “a rail carrier subject to part A of subtitle IV” for “an express carrier, sleeping car carrier, or rail carrier providing transportation subject to subchapter I of chapter 105”. 1994—Subsec. (e)(1). substituted “(J), (M), or (Q)” for “(J), or (M)” in two places. 1993—Subsec. (e)(2)(A)(iii). , § 13207(c)(1), added cl. (iii). Subsec. (e)(2)(B)(i). , § 13207(c)(2), amended heading and text of cl. (i) generally. Prior to amendment, text read as follows: “(I) In general.—Except as provided in subclause (II) of this clause and in clause (ii), the term ‘applicable base’ means for any calendar year the contribution and benefit base determined under section 230 of the Social Security Act for such calendar year. “(II) Hospital insurance taxes.—For purposes of applying so much of the rate applicable under section or (as the case may be) as does not exceed the rate of tax in effect under section , and for purposes of applying so much of the rate of tax applicable under section as does not exceed the rate of tax in effect under section , the term ‘applicable base’ means for any calendar year the applicable contribution base determined under section for such calendar year.” 1990—Subsec. (e)(2)(B)(i). , § 11331(c), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: “Except as provided in clause (ii), the term ‘applicable base’ means for any calendar year the contribution and benefit base determined under section 230 of the Social Security Act for such calendar year.” Subsec. (e)(8) to (10). , § 11704(a)(19), redesignated pars. (9) and (10) as (8) and (9), respectively. 1989—Subsec. (e)(1). , § 10207(b), inserted at end “Nothing in the regulations prescribed for purposes of chapter 24 (relating to wage withholding) which provides an exclusion from ‘wages’ as used in such chapter shall be construed to require a similar exclusion from ‘compensation’ in regulations prescribed for purposes of this chapter.” , § 10206(a), substituted “(iii)” for “or (iii)” and inserted “, or (iv) any remuneration which would not (if chapter 21 applied to such remuneration) be treated as wages (as defined in section ) by reason of section ”. , § 10205(a), inserted “or death, except that this clause does not apply to a payment for group-term life insurance to the extent that such payment is includible in the gross income of the employee” before “, (ii) tips”. Subsec. (e)(8). amended subsec. (e) to read as if amendments by , § 1011B(a)(22)(B), had not been enacted, see 1988 Amendment note below. Subsec. (e)(9). , § 10206(b), added par. (9). Subsec. (e)(10). , § 10207(a), added par. (10). 1988—Subsec. (e)(1). , § 1001(d)(2)(C)(ii), substituted “(F), (J), or (M)” for “(F) or (J)” in two places. Subsec. (e)(8). , § 1011B(a)(22)(B), added par. (8). 1986—Subsec. (e)(5). , § 122(e)(2), inserted reference to section . Subsec. (e)(6), (7). , § 1899A(41), redesignated par. (6), relating to amounts excludable under section , as (7). 1984—Subsec. (e)(5). , § 531(d)(2), added par. (5). Subsec. (e)(6). added par. (6) relating to amounts excludable under section . added par. (6) relating to amounts excludable under section . 1983—Subsec. (e)(1). , § 225(a)(3), struck out provisions that compensation which was paid in one calendar month but which would be payable in a prior or subsequent taxable month but for the fact prescribed date of payment would fall on a Saturday, Sunday or legal holiday would be deemed to have been paid in such prior or subsequent taxable month and that compensation which was earned during the period for which the Secretary would require a return of taxes under this chapter to be made and which was payable during the calendar month following such period would be deemed to have been paid during such period only. Subsec. (e)(2). , § 225(a)(1), amended par. (2) generally, substituting provisions which exclude compensation in excess of applicable base, which define “applicable base”, and which provide for the applicability of successor employer provisions to this paragraph, for provisions that a payment made by an employer to an individual through the employer’s payroll would be presumed, in the absence of evidence to the contrary, to be compensation for service rendered by such individual as an employee of the employer in the period with respect to which the payment was made, that an employee receiving retroactive wage payments would be deemed to be paid compensation in the period during which such compensation was earned only upon a written request by such employee, made within six months following the payment, and a showing that such compensation was earned during a period other than the period in which it was paid, that an employee would be deemed to be paid “for time lost” the amount he was paid by an employer with respect to an identifiable period of absence from the active service of the employer, including absence on account of personal injury, and the amount he was paid by the employer for loss of earnings resulting from his displacement to a less remunerative position or occupation, and that if a payment was made by an employer with respect to a personal injury and included pay for time lost, the total payment would be deemed to be paid for time lost unless, at the time of payment, a part of such payment was specifically apportioned to factors other than time lost, in which event only such part of the payment as was not so apportioned would be deemed to be paid for time lost. Subsec. (e)(3). , § 225(c)(1)(C), (6), substituted “taxes imposed by section ” for “tax imposed by section ”, and “such taxes” for “such tax”. Subsec. (e)(4)(A). , § 225(c)(7), substituted “3201(a), 3211(a)(1), and 3221(a)” for “3201(b) and 3221(b) (and so much of section as relates to the rates of the taxes imposed by sections and )”. Subsec. (h). , § 225(c)(8), substituted “taxes imposed by section ” for “tax imposed under section ”, and struck out “; and tips so deemed to be paid in any month shall be deemed paid for services rendered in such month” after “time received”. Subsec. (i). , § 225(b), added subsec. (i). 1981—Subsec. (e)(1). , § 743(a), inserted after third sentence provision that “Compensation which is paid in one calendar month but which would be payable in a prior or subsequent taxable month but for the fact that prescribed date of payment would fall on a Saturday, Sunday or legal holiday shall be deemed to have been paid in such prior or subsequent taxable month.” , § 741(d)(2), struck out cl. (iii) exclusion from term “compensation” the voluntary payment by an employer, without deduction from the remuneration of the employee, of the tax imposed on such employee by section , redesignated as cl. (iii) provisions formerly designated (iv). Subsec. (e)(2). , § 743(b), (c), inserted first sentence respecting presumption of a payment through the employer’s payroll as being compensation for services rendered as an employee in the period with respect to which payment is made, and in second sentence following “an employee” inserted “receiving retroactive wage payments”. Subsec. (e)(4). added par. (4). 1978—Subsec. (g). substituted “express carrier, sleeping car carrier, or rail carrier providing transportation subject to subchapter I of chapter of title ” for “express company, sleeping-car company, or carrier by railroad, subject to part I of the Interstate Commerce Act (49 U.S.C., chapter 1)”. 1976—Subsec. (a). , §§ 1903(a)(10)(A), 1906 (b)(13)(A), struck out “;” before “45 U.S.C., chapter 8” and “or his delegate” after “Secretary”, respectively. Subsec. (b). , § 1903(a)(10)(B), struck out in provisions following par. (4) “;” before “ U.S.C. ”. Subsec. (c). , § 1903(a)(10)(C), struck out “;” before “45 U.S.C. chapter 8”. Subsec. (d)(7). , § 1903(a)(10)(D), struck out “;” before “ U.S.C. ”. Subsec. (e)(1). provided that “compensation” not include amount of any payment (including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment) made to, or on behalf of, an employee or any of his dependents under a plan or system established by an employer which makes provision for his employees generally (or for his employees generally and their dependents) or for a class or classes of his employees (or for a class or classes of his employees and their dependents), on account of sickness or accident disability or medical or hospitalization expenses in connection with sickness or accident disability, or an amount paid specifically—either as an advance, as reimbursement or allowance—for traveling or other bona fide and necessary expenses incurred or reasonably expected to be incurred in the business of the employer provided any such payment is identified by the employer either by a separate payment or by specifically indicating the separate amounts where both wages and expense reimbursement or allowance are combined in a single payment. , § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”. 1975—Subsec. (e)(1). , § 204, substituted “paid to an individual for services rendered as an employee to one or more employers” for “earned by an individual for services rendered as an employee to one or more employers, or as an employee representative, including remuneration paid for time lost as an employee, but remuneration paid for time lost shall be deemed earned in the month in which such time is lost”. increased from $3 to $25 amount of compensation earned in the service of a local lodge or division of a railway-labor-organization employer to be disregarded with respect to any calendar month in the determination of amount of taxes under sections and . Subsec. (e)(2). , §§ 205, 206, substituted provision that an employee shall be deemed to be paid compensation in the period during which such compensation is earned only upon a written request by such employee, made within six months following the payment, and a showing that such compensation was earned during a period other than the period in which it was paid for provision that a payment made by an employer to an individual through the employer’s payroll shall be presumed, in the absence of evidence to the contrary, to be compensation for service rendered by such individual as an employee of the employer in the period with respect to which payment is made. 1968—Subsec. (e)(1). inserted provision excluding remuneration for service performed by nonresident alien individuals temporarily in the United States as participants in a cultural exchange or training program. 1965—Subsec. (e)(1). , § 2(b)(1), inserted “(except as is provided under paragraph (3))”. Subsec. (e)(3). , § 2(b)(2), added par. (3). Subsec. (h). , § 2(b)(3), added subsec. (h). 1954—Subsec. (e)(1). Act Aug. 31, 1954, excluded from taxation compensation, for service as a delegate to a national or international convention of a railway labor organization, of any person who has no other previous creditable service.

Effective Date of 2003 Amendment
Amendment by applicable to taxable years beginning after Dec. 31, 2003, see section 1201(k) of , set out as a note under section of this title.

Effective Date of 2001 Amendment
Amendment by applicable to calendar years beginning after Dec. 31, 2001, see section 204(f) of , set out as an Effective and Termination Dates of 2001 Amendments note under section of this title.

Effective Date of 1996 Amendment
Amendment by applicable to taxable years beginning after Dec. 31, 1996, see section 301(j) of , set out as a note under section of this title.

Effective Date of 1995 Amendment
Amendment by effective Jan. 1, 1996, see section 2 of , set out as an Effective Date note under section of Title , Transportation.

Effective Date of 1994 Amendment
Amendment by effective with calendar quarter following Aug. 15, 1994, see section 320(c) of , set out as a note under section of this title.

Effective Date of 1993 Amendment
Amendment by applicable to 1994 and later calendar years, see section 13207(e) of , set out as a note under section of this title.

Effective Date of 1990 Amendment
Amendment by section 11331(c) of applicable to 1991 and later calendar years, see section 11331(e) of , set out as a note under section of this title.

Effective Date of 1989 Amendments
Section 10205(b) of provided that: “(1) In general.—Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to— “(A) group-term life insurance coverage in effect after December 31, 1989, and “(B) remuneration paid before January 1, 1990, which the employer treated as compensation when paid. “(2) Exception.—The amendment made by subsection (a) shall not apply with respect to payments by the employer (or a successor of such employer) for group-term life insurance for such employer’s former employees who separated from employment with the employer on or before December 31, 1989, to the extent that such payments are not for coverage for any such employee for any period for which such employee is employed by such employer (or a successor of such employer) after the date of such separation. “(3) Benefit determinations to take into account remuneration on which tax paid.—The term ‘compensation’ as defined in section 1(h) of the Railroad Retirement Act of 1974 [ U.S.C. ] includes any remuneration which is included in the term ‘compensation’ as defined in section 3231(e)(1) of the Internal Revenue Code of 1986 by reason of the amendment made by subsection (a).” Section 10206(c) of provided that: “(1) Subsection (a).—The amendment made by subsection (a) [amending this section] shall apply to remuneration paid after December 31, 1989. “(2) Subsection (b).—Except as otherwise provided in this subsection— “(A) In general.—The amendment made by subsection (b) [amending this section] shall apply to— “(i) remuneration paid after December 31, 1989, and “(ii) remuneration paid before January 1, 1990, which the employer treated as compensation when paid. “(B) Benefit determinations to take into account remuneration on which tax paid.—The term ‘compensation’ as defined in section 1(h) of the Railroad Retirement Act of 1974 [ U.S.C. ] includes any remuneration which is included in the term ‘compensation’ as defined in section 3231(e)(1) of the Internal Revenue Code of 1986 by reason of the amendment made by subsection (b). “(3) Special rule for certain payments.—For purposes of applying the amendment made by subsection (b) to remuneration paid after December 31, 1989, which would have been taken into account before January 1, 1990, if such amendments had applied to periods before January 1, 1990, such remuneration shall be taken into account when paid (or, at the election of the payor, at the time which would be appropriate if such amendments had applied). “(4) Exception for certain 401(k) contributions.—The amendment made by subsection (b) shall not apply to employer contributions made during 1990 and attributable to services performed during 1989 under a qualified cash or deferred arrangement (as defined in section 401(k) of the Internal Revenue Code of 1986) if, under the terms of the arrangement as in effect on June 15, 1989— “(A) the employee makes an election with respect to such contributions before January 1, 1990, and “(B) the employer identifies the amount of such contribution before January 1, 1990. “(5) Special rule with respect to nonqualified deferred compensation plans.—In the case of an agreement in existence on June 15, 1989, between a nonqualified deferred compensation plan (as defined in section 3121(v)(2)(C) of such Code) and an individual, the amendment made by subsection (b) shall apply with respect to services performed by the individual after December 31, 1989. The preceding sentence shall not apply in the case of a plan to which section 457(a) of such Code applies.” Section 10207(c) of provided that: “The amendments made by this section [amending this section] shall apply to remuneration paid after December 31, 1989.” Amendment by effective as if included in section 1151 of , see section 203(c) of , set out as a note under section of this title.

Effective Date of 1988 Amendment
Amendment by section 1001(d)(2)(C)(ii) of effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see section 1019(a) of , set out as a note under section of this title. Amendment by section 1011B(a)(22)(B) of not applicable to any individual who separated from service with the employer before Jan. 1, 1989, see section 1011B(a)(22)(F) of , set out as a note under section of this title.

Effective Date of 1986 Amendment
Amendment by section 122(e)(2) of applicable to prizes and awards granted after Dec. 31, 1986, see section 151(c) of , set out as a note under section of this title.

Effective Date of 1984 Amendments
Section 1(d)(3) of provided that: “The amendment made by subsection (c) [amending this section] shall apply to remuneration paid after December 31, 1984.” Amendment by applicable to remuneration paid after Dec. 31, 1984, see section 1(g)(3) of , set out as a note under section of this title. Amendment by effective Jan. 1, 1985, see section 531(h) of , set out as an Effective Date note under section of this title.

Effective Date of 1983 Amendment
Amendment by applicable to remuneration paid after Dec. 31, 1984, see section 227(a) of , set out as a note under section of this title.

Effective Date of 1981 Amendments
Amendment by applicable to remuneration paid after Dec. 31, 1981, except as otherwise provided, see section 3(g) of , set out as a note under section of this title. Amendment by section 741(d)(2) of applicable to compensation paid for services rendered after Sept. 30, 1981, see section 741(e) of , set out as a note under section of this title. Section 743(d) of provided that: “The amendments made by this section [amending this section] shall apply for taxable years beginning after December 31, 1981.”

Effective Date of 1976 Amendment
Section 4(c)(2) of provided that: “The amendments made by subsection (b) of this section [amending this section] shall apply with respect to taxable years ending after December 31, 1953: Provided, however, That any taxes paid under the Railroad Retirement Tax Act [this chapter] prior to the date on which this Act is enacted [Oct. 18, 1976] shall not be affected or adjusted by reason of the amendments made by such subsection (b) except to the extent that the applicable period of limitation for the assessment of tax and the filing of a claim for credit or refund has not expired prior to the date on which this Act is enacted. If the applicable period of limitation for the filing of a claim for credit or refund would expire within the six-month period following the date on which this Act is enacted, the applicable period for the filing of such a claim for credit or refund shall be extended to include such six-month period.”

Effective Date of 1975 Amendments
Amendment by sections 204 and 205 of applicable for taxable years ending on or after Aug. 9, 1975, and for taxable years ending before Aug. 9, 1975, as to which the period for assessment and collection of tax or the filing of a claim for credit or refund has not expired on Aug. 9, 1975, and amendment by section 206 of applicable for taxable years beginning on or after Aug. 9, 1975: Provided, however, That with respect to payment made prior to Aug. 9, 1975, the employee may file a written request under section 206 of within six months after Aug. 9, 1975, see section 207 of , set out as a note under section of this title. Amendment by effective Jan. 1, 1975, and applicable only with respect to compensation paid for services rendered on or after Jan. 1, 1975, see section 203(c) of , set out as a note under section of this title.

Effective Date of 1968 Amendment
Section 4(a) of , as amended by , § 2, Oct. 22, 1986, , provided that: “(1) The amendments made by the first two sections of this Act [amending this section and section of Title , Railroads] shall apply with respect to service performed after December 31, 1961. “(2) Notwithstanding the expiration before the date of the enactment of this Act [Oct. 22, 1968] or within 6 months after such date of the period for filing claim for credit or refund, claim for credit or refund of any overpayment of any tax imposed by chapter 22 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954, U.S.C. et seq.] attributable to the amendment made by the first section of this Act [amending this section] may be filed at any time within one year after such date of enactment. “(3) Any credit or refund of an overpayment of the tax imposed by section 3201 or 3211 of the Internal Revenue Code of 1986 which is attributable to the amendment made by the first section of this Act shall be appropriately adjusted for any lump-sum payment which has been made under section 5(f)(2) of the Railroad Retirement Act of 1937 [section of Title ] before the date of the allowance of such credit or the making of such refund.”

Effective Date of 1965 Amendment
Amendment by effective only with respect to tips received after 1965, see section 6 of , set out as a note under section of this title.

Effective Date of 1954 Amendment
Amendment by act Aug. 31, 1954, effective as if enacted as a part of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], see section 407 of act Aug. 31, 1954, as amended, set out as a note under section of this title.

Regulations
For provisions requiring that the regulations prescribed under subsec. (e)(4) of this section prescribe procedures under which, if (with respect to any employee) the third party promptly (A) withholds the employee portion of the taxes involved, (B) deposits such portion under section 6302 of such Code, and (C) notifies the employer of the amount of the wages or compensation involved, the employer (and not the third party) shall be liable for the employer portion of the taxes involved and for meeting the requirements of section of this title (relating to receipts for employees) with respect to the wages or compensation involved, see section 3(d) of , set out as a note under section of this title.

Exclusion From Wages and Compensation of Refunds Required From employers To Compensate for Duplication of Medicare Benefits by Health Care Benefits Provided by Employers
For purposes of this chapter, the term “compensation” shall not include the amount of any refund required under section 421 of , U.S.C. , see section 10202 of , set out as a note under section of Title , The Public Health and Welfare.

Payments Under State Temporary Disability Law To Be Treated as Remuneration for Service
For purposes of applying subsec. (e) of this section with respect to subsec. (e)(4) of this section, payments under a State temporary disability law to be treated as remuneration for service, see section 3(e) of , set out as a note under section of this title.

Section Referred to in Other Sections
This section is referred to in sections , , , , , , , , , of this title; title sections , ; title section .

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