US (United States) Code. Title 26. Subtitle A: Income Taxes. Chapter 2: Tax on self-employement income

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Internal revenue code

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-CITE-

26 USC CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle A - Income Taxes

CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME

-HEAD-

CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME

-MISC1-

Sec.

1401. Rate of tax.

1402. Definitions.

1403. Miscellaneous provisions.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 139, 162, 416, 1016,

3510, 5041, 6017, 6103, 6414, 6511, 6521, 6654, 7651, 7655, 7701,

7851 of this title; title 42 sections 401, 405, 408, 1307; title 48

sections 1421h, 1421i.

-End-

-CITE-

26 USC Sec. 1401 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle A - Income Taxes

CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME

-HEAD-

Sec. 1401. Rate of tax

-STATUTE-

(a) Old-age, survivors, and disability insurance

In addition to other taxes, there shall be imposed for each

taxable year, on the self-employment income of every individual, a

tax equal to the following percent of the amount of the

self-employment income for such taxable year:

In the case of a taxable year

Beginning after: And before: Percent:

December 31, 1983 January 1, 1988 11.40

December 31, 1987 January 1, 1990 12.12

December 31, 1989 12.40

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(b) Hospital insurance

In addition to the tax imposed by the preceding subsection, there

shall be imposed for each taxable year, on the self-employment

income of every individual, a tax equal to the following percent of

the amount of the self-employment income for such taxable year:

In the case of a taxable year

Beginning after: And before: Percent:

December 31, 1983 January 1, 1985 2.60

December 31, 1984 January 1, 1986 2.70

December 31, 1985 2.90.

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(c) Relief from taxes in cases covered by certain international

agreements

During any period in which there is in effect an agreement

entered into pursuant to section 233 of the Social Security Act

with any foreign country, the self-employment income of an

individual shall be exempt from the taxes imposed by this section

to the extent that such self-employment income is subject under

such agreement to taxes or contributions for similar purposes under

the social security system of such foreign country.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 353; Sept. 1, 1954, ch. 1206,

title II, Sec. 208(a), 68 Stat. 1093; Aug. 1, 1956, ch. 836, title

II, Sec. 202(a), 70 Stat. 845; Pub. L. 85-840, title IV, Sec.

401(a), Aug. 28, 1958, 72 Stat. 1041; Pub. L. 87-64, title II, Sec.

201(a), June 30, 1961, 75 Stat. 140; Pub. L. 89-97, title I, Sec.

111(c)(4), title III, Sec. 321(a), July 30, 1965, 79 Stat. 342,

394; Pub. L. 90-248, title I, Sec. 109(a)(1), (b)(1), Jan. 2, 1968,

81 Stat. 835, 836; Pub. L. 92-336, title II, Sec. 204 (a)(1),

(b)(1), July 1, 1972, 86 Stat. 420, 421; Pub. L. 92-603, title I,

Sec. 135(a)(1), (b)(1), Oct. 30, 1972, 86 Stat. 1362, 1363; Pub. L.

93-233, Sec. 6(b)(1), Dec. 31, 1973, 87 Stat. 955; Pub. L. 94-455,

title XIX, Sec. 1901(a)(154), Oct. 4, 1976, 90 Stat. 1789; Pub. L.

95-216, title I, Sec. 101(a)(3), (b)(3), title III, Sec. 317(b)(1),

Dec. 20, 1977, 91 Stat. 1511, 1512, 1539; Pub. L. 98-21, title I,

Sec. 124(a), (b), Apr. 20, 1983, 97 Stat. 89; Pub. L. 101-508,

title XI, Sec. 11801(a)(36), (c)(16), Nov. 5, 1990, 104 Stat.

1388-521, 1388-527.)

-REFTEXT-

REFERENCES IN TEXT

Section 233 of the Social Security Act, referred to in subsec.

(c), is classified to section 433 of Title 42, The Public Health

and Welfare.

-MISC1-

AMENDMENTS

1990 - Subsecs. (c), (d). Pub. L. 101-508 redesignated subsec.

(d) as (c) and struck out former subsec. (c) which provided a

credit against self-employment taxes imposed by this section.

1983 - Subsec. (a). Pub. L. 98-21, Sec. 124(a), amended subsec.

(a) generally, substituting a table for former pars. (1) to (7)

which had imposed a tax on the self-employment income of every

individual (1) in the case of any taxable year beginning before

Jan. 1, 1978, to be equal to 7.0 percent of the amount of the

self-employment income for such taxable year; (2) in the case of

any taxable year beginning after Dec. 31, 1977, and before Jan. 1,

1979, to be equal to 7.10 percent of the amount of the

self-employment income for such taxable year; (3) in the case of

any taxable year beginning after Dec. 31, 1978, and before Jan. 1,

1981, to be equal to 7.05 percent of the amount of the

self-employment income for such taxable year; (4) in the case of

any taxable year beginning after Dec. 31, 1980, and before Jan. 1,

1982, to be equal to 8.00 percent of the amount of the

self-employment income for such taxable year; (5) in the case of

any taxable year beginning after Dec. 31, 1981, and before Jan. 1,

1985, to be equal to 8.05 percent of the amount of the

self-employment income for such taxable year; (6) in the case of

any taxable year beginning after Dec. 31, 1984, and before Jan. 1,

1990, to be equal to 8.55 percent of the amount of the

self-employment income for such taxable year; and (7) in the case

of any taxable year beginning after Dec. 31, 1989, to be equal to

9.30 percent of the amount of the self-employment income for such

taxable year.

Subsec. (b). Pub. L. 98-21, Sec. 124(a), amended subsec. (b)

generally, substituting a table for former pars. (1) to (6) which

had imposed a tax on the self-employment income of every individual

(1) in the case of any taxable year beginning after Dec. 31, 1973,

and before Jan. 1, 1978, to be equal to 0.90 percent of the amount

of the self-employment income for such taxable year; (2) in the

case of any taxable year beginning after Dec. 31, 1977, and before

Jan. 1, 1979, to be equal to 1.00 percent of the amount of the

self-employment income for such taxable year; (3) in the case of

any taxable year beginning after Dec. 31, 1978, and before Jan. 1,

1981, to be equal to 1.05 percent of the amount of the

self-employment income for such taxable year; (4) in the case of

any taxable year beginning after Dec. 31, 1980, and before Jan. 1,

1985, to be equal to 1.30 percent of the amount of the

self-employment income for such taxable year; (5) in the case of

any taxable year beginning after Dec. 31, 1984, and before Jan. 1,

1986, to be equal to 1.35 percent of the amount of the

self-employment income for such taxable year; and (6) in the case

of any taxable year beginning after Dec. 31, 1985, to be equal to

1.45 percent of the amount of the self-employment income for such

taxable year.

Subsecs. (c), (d). Pub. L. 98-21, Sec. 124(b), added subsec. (c)

and redesignated former subsec. (c) as (d).

1977 - Subsec. (a). Pub. L. 95-216, Sec. 101(a)(3), substituted

provisions calling for a graduated increase in the tax from 7.0

percent for taxable years beginning before Jan. 1, 1978, to 9.30

percent for taxable years beginning after Dec. 31, 1989, for

provisions under which the tax had been set at 7.0 percent without

any increase in the rate in future years.

Subsec. (b). Pub. L. 95-216, Sec. 101(b)(3), substituted "after

December 31, 1977, and before January 1, 1979" for "after December

31, 1977, and before January 1, 1981" and "1.00 percent" for "1.10

percent" in par. (2), substituted "after December 31, 1978, and

before January 1, 1981" for "after December 31, 1980, and before

January 1, 1986" and "1.05 percent" for "1.35 percent" in par. (3),

substituted "after December 31, 1980, and before January 1, 1985"

for "after December 31, 1985" and "1.30 percent" for "1.50 percent"

in par. (4), and added pars. (5) and (6).

Subsec. (c). Pub. L. 95-216, Sec. 317(b)(1), added subsec. (c).

1976 - Subsec. (a). Pub. L. 94-455, Sec. 1901(a)(154)(A), among

other changes, substituted provisions relating to a uniform tax

rate of 7 percent on self-employment income of every individual for

provisions relating to varied tax rate of 5.8 percent of the amount

of self-employment income for any taxable year beginning after Dec.

31, 1967, and before Jan. 1, 1969, 6.3 percent for any taxable year

beginning after Dec. 31, 1968, and before Jan. 1, 1971, 6.9 percent

for any taxable year beginning after Dec. 31, 1970, and before Jan.

1, 1973, and 7.0 percent for any taxable year beginning after Dec.

31, 1972.

Subsec. (b). Pub. L. 94-455, Sec. 1901(a)(154)(B), redesignated

pars. (3) to (6) as (1) to (4). Former pars. (1) and (2), which

related to a 6 percent tax rate on self-employment income for any

taxable year beginning after Dec. 31, 1967, and before Jan. 1,

1974, and 1 percent tax rate on self-employment income for any

taxable year beginning after Dec. 31, 1972, and before Jan. 1,

1974, were struck out.

1973 - Subsec. (b)(2). Pub. L. 93-233 substituted "1974" for

"1978".

Subsec. (b)(3). Pub. L. 93-233 substituted "1973" and "1978" for

"1977" and "1981" and decreased the rate of tax from 1.25 percent

to 0.90 percent.

Subsec. (b)(4). Pub. L. 93-233 substituted "1977" and "1981" for

"1980" and "1986" and decreased the rate of tax from 1.35 percent

to 1.10 percent.

Subsec. (b)(5). Pub. L. 93-233 substituted "beginning after

December 31, 1980, and before January 1, 1986" for "beginning after

December 31, 1985" and decreased the rate of tax from 1.45 percent

to 1.35 percent.

Subsec. (b)(6). Pub. L. 93-233 added par. (6).

1972 - Subsec. (a)(3). Pub. L. 92-603, Sec. 135(a)(1)(A),

substituted "1973" for "1978".

Subsec. (a)(4). Pub. L. 92-603, Sec. 135(a)(1)(B), substituted

provisions that in the case of taxable years beginning after Dec.

31, 1972, the tax shall be equal to 7.0 percent of the amount of

the self-employment income for such taxable year, for provisions

that in the case of taxable years beginning after Dec. 31, 1977,

and before Jan. 1, 2011, the tax shall be equal to 6.7 percent of

the amount of the self-employment income for such taxable year.

Subsec. (a)(5). Pub. L. 92-603, Sec. 135(a)(1)(B), struck out

par. (5) which provided that in the case of taxable years beginning

after Dec. 31, 2010, the tax shall be equal to 7.0 percent of the

amount of the self-employment income for the taxable year.

Subsec. (a)(3) to (5). Pub. L. 92-336, Sec. 204(a)(1),

substituted "January 1, 1978" for "January 1, 1973" and struck out

"and" after "such taxable year" in par. (3), extended from any

taxable year beginning after December 31, 1972 to any taxable year

beginning after December 31, 1977, and before January 1, 2011, and

decreased from 7.0 percent to 6.7 percent the provisions relating

to the tax on self-employment income in par. (4), and added par.

(5).

Subsec. (b)(2). Pub. L. 92-603, Sec. 135(b)(1), increased the

rate of tax from 0.9 percent to 1.0 percent.

Subsec. (b)(3). Pub. L. 92-603, Sec. 135(b)(1), substituted

"1981" for "1986" and "1.25" for "1.0".

Subsec. (b)(4). Pub. L. 92-603, Sec. 135(b)(1), substituted

"1980" for "1985", "1986" for "1993", and "1.35" for "1.1".

Subsec. (b)(5). Pub. L. 92-603, Sec. 135(b)(1), substituted

"1985" for "1992" and "1.45" for "1.2".

Subsec. (b)(2) to (5). Pub. L. 92-336, Sec. 204(b)(1),

substituted "1978" for "1976" and "0.9" for "0.65" in subsec.

(b)(2), "1977" for "1975", "1986" for "1980" and "1.0" for "0.70"

in par. (3), "1985" for "1979", "1993" for "1987" and "1.1" for

"0.80" in par. (4), and "1992" for "1986" and "1.2" for "0.90" in

par. (5).

1968 - Subsecs. (a)(1) to (4). Pub. L. 90-248, Sec. 109(a)(1),

substituted "December 31, 1967" and "January 1, 1969" for "December

31, 1965" and "January 1, 1967" in par. (1), "December 31, 1968",

"January 1, 1971" and "6.3" for "December 31, 1966", "January 1,

1969", and "5.9" in par. (2), and "December 31, 1970" and "6.9" for

"December 31, 1968" and "6.6" in par. (3), and reenacted par. (4)

without change.

Subsec. (b)(1) to (5). Pub. L. 90-248, Sec. 109(b)(1), struck out

par. (1) provision for rate of 0.35 percent of amount of

self-employment income for any taxable year beginning after Dec.

31, 1965, and before Jan. 1, 1967, redesignated former pars. (2) to

(6) as (1) to (5), substituted "December 31, 1967" for "December

31, 1966" in such par. (1) and increased the rate by 0.10 percent

to 0.60, 0.65, 0.70, 0.80, and 0.90 in pars. (1) to (5),

respectively.

1965 - Pub. L. 89-97, Sec. 321(a), divided the total tax imposed

under the entire section for each taxable year upon the

self-employment income for such taxable year into two separate

taxes by dividing the section into subsecs. (a) and (b), with

subsec. (a) reflecting the tax for old-age, survivors, and

disability insurance and subsec. (b) reflecting a separate tax for

hospital insurance; reduced from 6.2 percent to 6.15 percent the

rate of total tax imposed under the entire section for taxable

years beginning after Dec. 31, 1965, and before Jan. 1, 1967

(resulting from a tax of 5.8 percent under subsec. (a) and 0.35

percent under subsec. (b)), increased from 6.2 percent to 6.4

percent the rate for taxable years beginning after Dec. 31, 1966,

and before Jan. 1, 1968 (resulting from a tax of 5.9 percent under

subsec. (a) and 0.50 percent under subsec. (b)), reduced from 6.9

percent to 6.4 percent the rate for taxable years beginning after

Dec. 31, 1967, and before Jan. 1, 1969 (resulting from a tax of 5.9

percent under subsec. (a) and 0.50 percent under subsec. (b)),

increased from 6.9 percent to 7.1 percent the rate for taxable

years beginning after Dec. 31, 1968, and before Jan. 1, 1973

(resulting from a tax of 6.6 percent under subsec. (a) and 0.50

percent under subsec. (b)), from 6.9 percent to 7.55 percent the

rate for taxable years beginning after Dec. 31, 1972, and before

Jan. 1, 1976 (resulting from a tax of 7.0 percent under subsec. (a)

and 0.55 percent under subsec. (b)), from 6.9 percent to 7.60

percent the rate for taxable years beginning after Dec. 31, 1975,

and before Jan. 1, 1980 (resulting from a tax of 7.0 percent under

subsec. (a) and 0.60 percent under subsec. (b)), from 6.9 percent

to 7.70 percent the rate for taxable years beginning after Dec. 31,

1979, and before Jan. 1, 1987 (resulting from a tax of 7.0 percent

under subsec. (a) and 0.70 percent under subsec. (b)), and from 6.9

percent to 7.80 percent the rate for taxable years beginning after

Dec. 31, 1986 (resulting from a tax of 7.0 percent under subsec.

(a) and 0.80 percent under subsec. (b)), and provided that the

exclusion of employee representatives by section 1402(c)(3) should

not apply for purposes of the tax imposed by subsec. (b).

Subsec. (b). Pub. L. 89-97, Sec. 111(c)(4), struck out provision

that for purposes of the tax imposed by this subsection, the

exclusion of employee representatives by section 1402(c)(3) shall

not apply.

1961 - Pub. L. 87-64 increased the rate of tax for taxable years

beginning after Dec. 31, 1961, and before Jan. 1, 1963, from 4 1/2

to 4.7 percent, taxable years beginning after Dec. 31, 1962, and

before Jan. 1, 1966, from 5 1/4 to 5.4 percent, taxable years

beginning after Dec. 31, 1965, and before Jan. 1, 1968, from 6 to

6.2 percent, taxable year beginning after Dec. 31, 1967, and before

Jan. 1, 1969, from 6 to 6.9 percent, and taxable years beginning

after Dec. 31, 1968, from 6 3/4 to 6.9 percent.

1958 - Pub. L. 85-840 increased the rate of tax by substituting

provisions imposing a tax of 3 3/4 percent for taxable years

beginning after Dec. 31, 1958, 4 1/2 percent for years beginning

after Dec. 31, 1959, 5 1/4 percent for years beginning after Dec.

31, 1962, 6 percent for years beginning after Dec. 31, 1965, and 6

3/4 percent for years beginning after Dec. 31, 1968, for

provisions which imposed a tax of 3 3/8 percent for taxable years

beginning after Dec. 31, 1956, 4 1/8 percent for years beginning

after Dec. 31, 1959, 4 7/8 percent for years beginning after Dec.

31, 1964, 5 5/8 percent for years beginning after Dec. 31, 1969,

and 6 3/8 percent for years beginning after Dec. 31, 1974.

1956 - Act Aug. 1, 1956, increased the rate of tax for all

taxable years beginning after Dec. 31, 1956, by three-eighths

percent.

1954 - Act Sept. 1, 1954, increased the 4 7/8 percent rate of

tax on self-employment income for taxable years beginning after

Dec. 31, 1969, to 5 1/4 percent for taxable years beginning after

Dec. 31, 1969, and before Jan. 1, 1975, and 6 percent for taxable

years beginning after Dec. 31, 1974.

EFFECTIVE DATE OF 1983 AMENDMENT

Section 124(d) of Pub. L. 98-21 provided that:

"(1) In general. - Except as provided in paragraph (2), the

amendments made by this section [amending this section, sections

32, 164, 275, 401, and 1402 of this title, and section 411 of Title

42, The Public Health and Welfare] shall apply to taxable years

beginning after December 31, 1983.

"(2) Subsection (c). - The amendments made by subsection (c)

[amending sections 32, 164, 275, 401, and 1402 of this title and

section 411 of Title 42] shall apply to taxable years beginning

after December 31, 1989."

EFFECTIVE DATE OF 1977 AMENDMENT

Section 104 of title I of Pub. L. 95-216 provided that: "The

amendments made by this title [amending this section, sections 3101

and 3111 of this title, and sections 401, 415, and 430 of Title 42,

The Public Health and Welfare] shall apply with respect to

remuneration paid or received, and taxable years beginning, after

1977."

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 effective for taxable years beginning

after Dec. 31, 1976, see section 1901(d) set out as a note under

section 2 of this title.

EFFECTIVE DATE OF 1973 AMENDMENT

Section 6(c) of Pub. L. 93-233 provided that: "The amendment made

by subsection (b)(1) [amending this section] shall apply only with

respect to taxable years beginning after December 31, 1973. The

remaining amendments made by this section [amending sections 3101

and 3111 of this title] shall apply only with respect to

remuneration paid after December 31, 1973."

EFFECTIVE DATE OF 1972 AMENDMENTS

Section 135(c) of Pub. L. 92-603 provided that: "The amendments

made by subsections (a)(1) and (b)(1) [amending this section] shall

apply only with respect to taxable years beginning after December

31, 1972. The remaining amendments made by this section [amending

sections 3101 and 3111 of this title] shall apply only with respect

to remuneration paid after December 31, 1972."

Section 204(c) of Pub. L. 92-336 provided that: "The amendments

made by subsections (a)(1) and (b)(1) [amending this section] shall

apply only with respect to taxable years beginning after December

31, 1972. The remaining amendments made by this section [amending

sections 3101 and 3111 of this title] shall apply only with respect

to remuneration paid after December 31, 1972."

EFFECTIVE DATE OF 1968 AMENDMENT

Section 109(c) of Pub. L. 90-248 provided that: "The amendments

made by subsections (a)(1) and (b)(1) [amending this section] shall

apply only with respect to taxable years beginning after December

31, 1967. The remaining amendments made by this section [amending

sections 3101 and 3111 of this title] shall apply only with respect

to remuneration paid after December 31, 1967."

EFFECTIVE DATE OF 1965 AMENDMENT

Amendment by section 111(c)(4) of Pub. L. 89-97 applicable to

calendar year 1966 or to any subsequent calendar year but only if

by October 1 immediately preceding such calendar year the Railroad

Retirement Tax Act [section 3201 et seq. of this title] provides

for a maximum amount of monthly compensation taxable under such Act

during all months of such calendar year equal to one-twelfth of

maximum wages which Federal Insurance Contributions Act [section

3101 et seq. of this title] provides may be counted for such

calendar year, see section 111(e) of Pub. L. 89-97, set out as an

Effective Date note under section 1395i-1 of Title 42, The Public

Health and Welfare.

Section 321(d) of Pub. L. 89-97 provided that: "The amendments

made by subsection (a) [amending this section] shall apply only

with respect to taxable years beginning after December 31, 1965.

The amendments made by subsections (b) and (c) [amending sections

3101 and 3111 of this title] shall apply only with respect to

remuneration paid after December 31, 1965."

EFFECTIVE DATE OF 1961 AMENDMENT

Section 201(d) of Pub. L. 87-64 provided that: "The amendment

made by subsection (a) [amending this section] shall apply with

respect to taxable years beginning after December 31, 1961. The

amendments made by subsections (b) and (c) [amending sections 3101

and 3111 of this title] shall apply with respect to remuneration

paid after December 31, 1961."

EFFECTIVE DATE OF 1958 AMENDMENT

Section 401(d) of Pub. L. 85-840 provided that: "The amendment

made by subsection (a) [amending this section] shall apply with

respect to taxable years beginning after December 31, 1958. The

amendments made by subsections (b) and (c) [amending sections 3101

and 3111 of this title] shall apply with respect to remuneration

paid after December 31, 1958."

EFFECTIVE DATE OF 1956 AMENDMENT

Section 202(d) of act Aug. 1, 1956, provided that: "The amendment

made by subsection (a) [amending this section] shall apply with

respect to taxable years beginning after December 31, 1956. The

amendments made by subsections (b) and (c) [amending sections 3101

and 3111 of this title] shall apply with respect to remuneration

paid after December 31, 1956."

SAVINGS PROVISION

For provisions that nothing in amendment by Pub. L. 101-508 be

construed to affect treatment of certain transactions occurring,

property acquired, or items of income, loss, deduction, or credit

taken into account prior to Nov. 5, 1990, for purposes of

determining liability for tax for periods ending after Nov. 5,

1990, see section 11821(b) of Pub. L. 101-508, set out as a note

under section 29 of this title.

LAND DIVERTED UNDER 1983 PAYMENT-IN-KIND PROGRAM

Land diverted from production of agricultural commodities under a

1983 payment-in-kind program to be treated, for purposes of this

chapter, as used during the 1983 crop year by qualified taxpayers

in the active conduct of the trade or business of farming, with

qualified taxpayers who materially participate in the diversion and

devotion to conservation uses under a 1983 payment-in-kind program

to be treated as materially participating in the operation of such

land during the 1983 crop year, see section 3 of Pub. L. 98-4, set

out as a note under section 61 of this title.

DEDUCTION BY OR CREDIT AGAINST INDIVIDUAL INCOME TAX FOR TAXES PAID

INTO FOREIGN SOCIAL SECURITY SYSTEM PURSUANT TO INTERNATIONAL

AGREEMENT

Section 317(b)(4) of Pub. L. 95-216 provided that:

"Notwithstanding any other provision of law, taxes paid by any

individual to any foreign country with respect to any period of

employment or self-employment which is covered under the social

security system of such foreign country in accordance with the

terms of an agreement entered into pursuant to section 233 of the

Social Security Act [section 433 of Title 42, The Public Health and

Welfare] shall not, under the income tax laws of the United States,

be deductible by, or creditable against the income tax of, any such

individual."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 24, 164, 1402, 3231, 6213

of this title; title 42 sections 910, 911, 1395i.

-End-

-CITE-

26 USC Sec. 1402 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle A - Income Taxes

CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME

-HEAD-

Sec. 1402. Definitions

-STATUTE-

(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, all of the gross income and deductions

attributable to such trade or business shall be treated as the

gross income and deductions of the husband unless the wife

exercises substantially all of the management and control of

such trade or business, in which case all of such gross income

and deductions shall be treated as the gross income and

deductions of the wife; 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; and

(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.

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.

(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,.(!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).

(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).

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 353; Sept. 1, 1954, ch. 1206,

title II, Sec. 201(a)-(c), 68 Stat. 1087; Aug. 1, 1956, ch. 836,

title II, Sec. 201(e)(2), (3), (f), (g), (i), 70 Stat. 840-842;

Pub. L. 85-239, Secs. 1(a), (b), 2, 5(b), Aug. 30, 1957, 71 Stat.

521-523; Pub. L. 85-840, title IV, Secs. 402(a), 403(a), Aug. 28,

1958, 72 Stat. 1042, 1043; Pub. L. 86-778, title I, Secs.

101(a)-(c), 103(k), (l), 105(c)(1), 106(b), Sept. 13, 1960, 74

Stat. 926, 927, 938, 944, 945; Pub. L. 87-64, title II, Sec.

202(a), June 30, 1961, 75 Stat. 141; Pub. L. 88-272, title II, Sec.

227(b)(6), Feb. 26, 1964, 78 Stat. 98; Pub. L. 88-650, Sec. 2(a),

(b), Oct. 13, 1964, 78 Stat. 1076, 1077; Pub. L. 89-97, title III,

Secs. 311(b)(1)-(3), 312(b), 319(a), (c), 320(b)(1), 331(a),

341(a), (b), July 30, 1965, 79 Stat. 381, 390, 391, 393, 401, 411;

Pub. L. 89-368, title I, Sec. 102(c), Mar. 15, 1966, 80 Stat. 64;

Pub. L. 90-248, title I, Secs. 108(b)(1), 115(b), 118(a), 122(b),

title V, Secs. 501(a), 502(b)(1), Jan. 2, 1968, 81 Stat. 835, 839,

841, 843, 933, 934; Pub. L. 92-5, title II, Sec. 203(b)(1), Mar.

17, 1971, 85 Stat. 10; Pub. L. 92-336, title II, Sec. 203(b)(1),

July 1, 1972, 86 Stat. 418; Pub. L. 92-603, title I, Secs. 121(b),

124(b), 140(b), Oct. 30, 1972, 86 Stat. 1353, 1357, 1366; Pub. L.

93-66, title II, Sec. 203(b)(1), July 9, 1973, 87 Stat. 153; Pub.

L. 93-233, Sec. 5(b)(1), Dec. 31, 1973, 87 Stat. 954; Pub. L.

93-368, Sec. 10(b), Aug. 7, 1974, 88 Stat. 422; Pub. L. 94-92,

title II, Sec. 203(a), Aug. 9, 1975, 89 Stat. 465; Pub. L. 94-455,

title XII, Sec. 1207(e)(1)(B), title XIX, Secs. 1901(a)(155),

(b)(1)(I)(iii), (X), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1707,

1789, 1791, 1792, 1834; Pub. L. 95-216, title III, Sec. 313(b),

Dec. 20, 1977, 91 Stat. 1536; Pub. L. 95-600, title VII, Sec.

703(j)(8), Nov. 6, 1978, 92 Stat. 2941; Pub. L. 95-615, Sec.

202(g)(5), formerly Sec. 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, Secs. 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, Secs.

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, Secs. 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, Secs. 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.)

-REFTEXT-

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.

-MISC1-

AMENDMENTS

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, Secs. 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, Secs. 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, Secs. 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, Secs. 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 [Secs. 1101-1147 and 1171-1177] or

title XVIII [Secs. 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.

-SECREF-

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.

-FOOTNOTE-

(!1) So in original.

-End-

-CITE-

26 USC Sec. 1403 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle A - Income Taxes

CHAPTER 2 - TAX ON SELF-EMPLOYMENT INCOME

-HEAD-

Sec. 1403. Miscellaneous provisions

-STATUTE-

(a) Title of chapter

This chapter may be cited as the "Self-Employment Contributions

Act of 1954".

(b) Cross references

(1) For provisions relating to returns, see section 6017.

(2) For provisions relating to collection of taxes in Virgin

Islands, Guam, American Samoa, and Puerto Rico, see section

7651.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 355; Pub. L. 86-778, title I,

Sec. 103(m), Sept. 13, 1960, 74 Stat. 938; Pub. L. 89-368, title I,

Sec. 102(b)(6), Mar. 15, 1966, 80 Stat. 64; Pub. L. 98-369, div. A,

title IV, Sec. 412(b)(2), July 18, 1984, 98 Stat. 792.)

-MISC1-

AMENDMENTS

1984 - Subsec. (b)(3). Pub. L. 98-369 struck out par. (3)

referring to section 6015 for provisions relating to declarations

of estimated tax on self-employment income.

1966 - Subsec. (b)(3). Pub. L. 89-368 added par. (3).

1960 - Subsec. (b)(2). Pub. L. 86-778 included Guam and American

Samoa.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 applicable with respect to taxable

years beginning after Dec. 31, 1984, see section 414(a)(1) of Pub.

L. 98-369, set out as a note under section 6654 of this title.

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.

-End-