US (United States) Code. Title 26. Subtitle C: Employment Taxes. Chapter 22: Railroad Retirement Tax Act

Codificación normativa de EEUU (Estados Unidos) Legislación Federal estadounidense # Internal Revenue Code

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26 USC CHAPTER 22 - RAILROAD RETIREMENT TAX ACT 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

-HEAD-

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

-MISC1-

Subchapter Sec.(!1)

A. Tax on employees 3201

B. Tax on employee representatives 3211

C. Tax on employers 3221

D. General provisions 3231

E. Tier 2 tax rate determination. 3241

AMENDMENTS

2001 - Pub. L. 107-90, title II, Sec. 204(e)(5), Dec. 21, 2001,

115 Stat. 893, added item for subchapter E.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 3121, 3301, 3306, 3503,

5041, 6103, 6302 of this title; title 31 section 9502; title 42

section 1307; title 45 sections 358, 1207; title 49 sections 10501,

24301.

-FOOTNOTE-

(!1) Section numbers editorially supplied.

-End-

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26 USC Subchapter A - Tax on Employees 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter A - Tax on Employees

-HEAD-

SUBCHAPTER A - TAX ON EMPLOYEES

-MISC1-

Sec.

3201. Rate of tax.

3202. Deduction of tax from compensation.

-End-

-CITE-

26 USC Sec. 3201 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter A - Tax on Employees

-HEAD-

Sec. 3201. Rate of tax

-STATUTE-

(a) Tier 1 tax

In addition to other taxes, there is hereby imposed on the income

of each employee a tax equal to the applicable percentage of the

compensation received during any calendar year by such employee for

services rendered by such employee. For purposes of the preceding

sentence, the term "applicable percentage" means the percentage

equal to the sum of the rates of tax in effect under subsections

(a) and (b) of section 3101 for the calendar year.

(b) Tier 2 tax

(1) In general

In addition to other taxes, there is hereby imposed on the

income of each employee a tax equal to the applicable percentage

of the compensation received during any calendar year by such

employee for services rendered by such employee.

(2) Applicable percentage

For purposes of paragraph (1), the term "applicable percentage"

means -

(A) 4.90 percent in the case of compensation received during

2002 or 2003, and

(B) in the case of compensation received during any calendar

year after 2003, the percentage determined under section 3241

for such calendar year.

(c) Cross reference

For application of different contribution bases with respect

to the taxes imposed by subsections (a) and (b), see section

3231(e)(2).

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 431; Aug. 31, 1954, ch. 1164,

pt. II, Sec. 206(a), 68 Stat. 1040; Pub. L. 86-28, pt. II, Sec.

201(a), May 19, 1959, 73 Stat. 28; Pub. L. 88-133, title II, Sec.

201, Oct. 5, 1963, 77 Stat. 221; Pub. L. 89-97, title I, Secs.

105(b)(1), 111(c)(1), July 30, 1965, 79 Stat. 335, 342; Pub. L.

89-212, Secs. 4, 5(a), Sept. 29, 1965, 79 Stat. 861; Pub. L.

89-699, title III, Sec. 301(a), Oct. 30, 1966, 80 Stat. 1078; Pub.

L. 89-700, title III, Sec. 301(v), (vi), Oct. 30, 1966, 80 Stat.

1088, 1089; Pub. L. 93-69, title I, Sec. 102(a), July 10, 1973, 87

Stat. 162; Pub. L. 94-93, title II, Sec. 201, Aug. 9, 1975, 89

Stat. 466; Pub. L. 94-455, title XIX, Sec. 1903(a)(6), Oct. 4,

1976, 90 Stat. 1807; Pub. L. 97-34, title VII, Sec. 741(a), Aug.

13, 1981, 95 Stat. 347; Pub. L. 98-76, title II, Secs. 211(a), 221,

Aug. 12, 1983, 97 Stat. 419, 420; Pub. L. 100-203, title IX, Sec.

9031(a), Dec. 22, 1987, 101 Stat. 1330-296; Pub. L. 101-508, title

V, Sec. 5125(a), Nov. 5, 1990, 104 Stat. 1388-285; Pub. L. 107-90,

title II, Sec. 204(c), Dec. 21, 2001, 115 Stat. 892.)

-MISC1-

AMENDMENTS

2001 - Subsec. (b). Pub. L. 107-90 amended heading and text of

subsec. (b) generally. Prior to amendment, text read as follows:

"In addition to other taxes, there is hereby imposed on the income

of each employee a tax equal to 4.90 percent of the compensation

received during any calendar year by such employee for services

rendered by such employee."

1990 - Subsec. (a). Pub. L. 101-508 substituted "applicable" for

"following" before "percentage of the" and provision defining the

term "applicable percentage" for provision specifying that in the

case of compensation received during 1985 the rate of tax was 7.05

percent, for 1986 or 1987 the rate was 7.15 percent, for 1988 or

1989 the rate was 7.51 percent, and 1990 or thereafter the rate was

7.65 percent.

1987 - Subsec. (b). Pub. L. 100-203 amended subsec. (b)

generally. Prior to amendment, subsec. (b) read as follows: "In

addition to other taxes, there is hereby imposed on the income of

each employee a tax equal to the following percentage of the

compensation received during any calendar year by such employee for

services rendered by such employee:

"In the case of compensation

received during: The rate shall

be:

1985 3.50

1986 or thereafter 4.25."

1983 - Pub. L. 98-76, Sec. 221, amended section generally,

substituting a two tiered tax system with accompanying tax rate

tables and a cross reference to section 3231 of this title, for

provisions which had taxed an employee at 2.75 percent of so much

of the compensation paid in any calendar month to such employee for

services rendered by him as was not in excess of an amount equal to

one-twelfth of the current maximum annual taxable "wages" as

defined in section 3121 for any month and which had provided that

the rate of tax imposed by subsection (a) be increased by the rate

of the tax imposed with respect to wages by section 3101(a) plus

the rate imposed by section 3101(b) of so much of the compensation

paid in any calendar month to such employee for services rendered

by him as was not in excess of an amount equal to one-twelfth of

the current maximum annual taxable "wages" as defined in section

3121 for any month.

Pub. L. 98-76, Sec. 211(a), substituted "2.75 percent" for "2.0

percent".

1981 - Subsec. (a). Pub. L. 97-34 added subsec. (a).

Subsec. (b). Pub. L. 97-34 designated existing provisions as

subsec. (b) and substituted "The rate of tax imposed by subsection

(a) shall be increased by" for "In addition to other taxes, there

is hereby imposed on the income of every employee a tax rate equal

to".

1976 - Pub. L. 94-455 struck out "of the Internal Revenue Code of

1954" after "wages by section 3101(a)", "of such Code" after "rate

imposed by section 3101(b)", "after September 30, 1973," after "for

services rendered by him", "of the Internal Revenue Code of 1954"

after "as defined in section 3121", and "after September 30, 1973"

after "for any month".

1975 - Pub. L. 94-93 inserted "in any calendar month" after

"compensation paid".

1973 - Pub. L. 93-69 substituted new tax rate provisions on

income of employee for services rendered after Sept. 30, 1973, for

former provisions which prescribed 6 1/4 , 6 1/2 , 7, 7 1/4 , and 7

1/2 percent on income for services rendered after Sept. 30, 1965,

Dec. 31, 1965, Dec. 31, 1966, Dec. 31, 1967, and Dec. 31, 1968,

respectively, as is not in excess of (i) $450, or (ii) an amount

equal to one-twelfth of the current maximum annual taxable "wages"

as defined in section 3121 of the Internal Revenue Code of 1954,

whichever is greater, for any month after September 30, 1965:

Provided, That the rate of tax imposed by this section shall be

increased, with respect to compensation paid for services rendered

after September 30, 1965, by a number of percentage points

(including fractional points) equal at any given time to the number

of percentage points (including fractional points) by which the

rate of the tax imposed with respect to wages by section 3101(a)

plus the rate imposed by section 3101(b) at such time exceeds 2 3/4

percent (the rate provided by paragraph (2) of section 3101 as

amended by the Social Security Amendments of 1956).

1966 - Pub. L. 89-700 substituted "rendered after September 30,

1965" for "rendered after December 31, 1964", and "(i) $450, or

(ii) an amount equal to one-twelfth of the current maximum annual

taxable 'wages' as defined in section 3121 of the Internal Revenue

Code of 1954, whichever is greater, for any month after September

30, 1965" for "$400 for any calendar month before the calendar

month next following the month in which this provision was amended

in 1963, or $450 for any calendar month after the month in which

this provision was so amended and before the calendar month next

following the calendar month in which this provision was amended in

1965, or (i) $450, or (ii) an amount equal to one-twelfth of the

current maximum annual taxable 'wages' as defined in section 3121

of the Internal Revenue Code of 1954, whichever is greater, for any

month after the month in which this provision was so amended".

Pub. L. 89-699 substituted "7 percent" for "6 3/4 percent" in

subd. (3), "7 1/4 percent" for "7 percent" in subd. (4), and "7

1/2 percent" for "7 1/4 percent" in subd. (5).

1965 - Pub. L. 89-212 substituted pars. (1) to (5) for former

pars. (1) and (2) which imposed a tax equal to 6 3/4 percent of so

much of the compensation paid to such employee for services

rendered by him after the month in which this provision was amended

in 1959, and before Jan. 1, 1962, and 7 1/4 percent of so much of

the compensation paid to such employee for services rendered by him

after Dec. 31, 1961, and inserted "and before the calendar month

next following the calendar month in which this provision was

amended in 1965, or (i) $450, or (ii) an amount equal to

one-twelfth of the current maximum annual taxable 'wages' as

defined in section 3121 of the Internal Revenue Code of 1954,

whichever is greater, for any month after the month in which this

provision was so amended".

Pub. L. 89-97 substituted "the rate of the tax imposed with

respect to wages by section 3101(a) at such time exceeds 2 3/4

percent (the rate provided by paragraph (2) of section 3101 as

amended by the Social Security Amendments of 1956)" for "the rate

of the tax imposed with respect to wages by section 3101 at such

time exceeds the rate provided by paragraph (2) of such section

3101 as amended by the Social Security Amendments of 1956" and

inserted "plus the rate imposed by section 3101(b)" after "section

3101(a)", respectively.

1963 - Pub. L. 88-133 limited existing taxable compensation base

of $400 to any calendar month before Nov. 1963 and increased such

base to $450 for any calendar month after Oct. 1963.

1959 - Pub. L. 86-28 increased tax from 6 1/4 percent of

compensation not in excess of $350 for any calendar month to 6 3/4

percent of the compensation not in excess of $400 for any calendar

month for services rendered before Jan. 1, 1962, and to 7 1/4

percent for services rendered after Dec. 31, 1961, and required an

increase in the rate of tax with respect to compensation paid for

services rendered after Dec. 31, 1964, by a number of percentage

points equal at any given time to the number of percentage points

by which the rate of tax imposed by section 3101 of this title at

such time exceeds the rate provided by par. (2) of such section

3101 as amended by the Social Security Amendments of 1956.

1954 - Act Aug. 31, 1954, substituted "$350" for "$300".

EFFECTIVE DATE OF 2001 AMENDMENT

Amendment by Pub. L. 107-90 applicable to calendar years

beginning after Dec. 31, 2001, see section 204(f) of Pub. L.

107-90, set out as an Effective and Termination Dates of 2001

Amendments note under section 24 of this title.

EFFECTIVE DATE OF 1987 AMENDMENT

Section 9031(b) of Pub. L. 100-203 provided that: "The amendment

made by this section [amending this section] shall apply with

respect to compensation received after December 31, 1987."

EFFECTIVE AND TERMINATION DATES OF 1983 AMENDMENT

Section 212 of Pub. L. 98-76 provided that: "The amendments made

by this part [part I (Secs. 211, 212) of subtitle A of title II of

Pub. L. 98-76, amending this section, sections 3211 and 3221 of

this title, and section 430 of Title 42, The Public Health and

Welfare] shall apply to compensation paid for services rendered

after December 31, 1983, and before January 1, 1985."

Section 227(a) of Pub. L. 98-76 provided that: "The amendments

made by sections 221, 222, 223, and 225 [amending this section and

sections 3202, 3211, 3221, and 3231 of this title and section 430

of Title 42] shall apply to remuneration paid after December 31,

1984."

EFFECTIVE DATE OF 1981 AMENDMENT

Section 741(e) of Pub. L. 97-34 provided that: "The amendments

made by this section [amending this section and sections 3211,

3221, and 3231 of this title and section 430 of Title 42, The

Public Health and Welfare] shall apply to compensation paid for

services rendered after September 30, 1981."

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 applicable with respect to

compensation paid for services rendered after Dec. 31, 1976, see

section 1903(d) of Pub. L. 94-455, set out as a note under section

3101 of this title.

EFFECTIVE DATE OF 1975 AMENDMENT

Section 207 of Pub. L. 94-93 provided that: "The amendments made

by sections 201 through 205 of this title [amending this section

and sections 3211, 3221, and 3231 of this title] shall apply for

taxable years ending on or after the date of the enactment of this

Act [Aug. 9, 1975] and for taxable years ending before the date of

the enactment of this Act as to which the period for assessment and

collection of tax or the filing of a claim for credit or refund has

not expired on the date of enactment of this Act. The amendment

made by section 206 of this title [amending section 3231 of this

title] shall apply for taxable years beginning on or after the date

of enactment of this Act: Provided, however, That with respect to

payment made prior to the date of enactment of this Act, the

employee may file a written request under section 206 within six

months after the enactment of this Act."

EFFECTIVE DATE OF 1973 AMENDMENT

Section 109(b) of Pub. L. 93-69 provided that: "The amendments

made by section 102 of this Act [amending this section and sections

3202, 3211, and 3221 of this title] shall become effective on

October 1, 1973, and shall apply only with respect to compensation

paid for services rendered on or after that date: Provided,

however, That such amendments shall not be applicable to any dock

company, common carrier railroad, or railway labor organization

described in section 1(a) of the Railroad Retirement Act of 1937

[section 228a(a) of Title 45, Railroads], with respect to those of

its employees covered as of October 1, 1973, by a private

supplemental pension plan established through collective

bargaining, where a moratorium in an agreement made on or before

March 8, 1973, is applicable to changes in rates of pay contained

in the current collective-bargaining agreement covering such

employees, until the earlier of (1) the date as of which such

moratorium expires, or (2) the date as of which such dock company,

common carrier railroad, or railway labor organization agrees

through collective bargaining to make the provisions of such

amendments applicable."

EFFECTIVE DATE OF 1965 AMENDMENTS

Section 6 of Pub. L. 89-212 provided that: "The amendments made

by sections 1 and 3 of this Act [amending sections 228b, 228c, and

228e of Title 45, Railroads] shall take effect with respect to

annuities accruing and deaths occurring in months after the month

in which this Act is enacted [September 1965], and shall apply also

to annuities paid in lump sums equal to their commuted value

because of a reduction in such annuities under section 2(e) of the

Railroad Retirement Act of 1937 [section 228b(e) of Title 45], as

in effect before the amendments made by this Act, as if such

annuities had not been paid in such lump sums: Provided, however,

That the amounts of such annuities which were paid in lump sums

equal to their commuted value shall not be included in the amount

of annuities which become payable by reason of section 1 of this

Act [amending section 228b of Title 45]. The amendments made by

section 2 of this Act [amending sections 3203, 3231, 3402, 6053,

and 6652 of this title, and section 228a of Title 45] shall apply

only with respect to tips received after 1965. The amendments made

by section 4 of this Act [amending this section and sections 3202,

3211, and 3221 of this title] shall apply only with respect to

calendar months after the month in which this Act is enacted. The

amendments made by section 5 of this Act [amending this section and

sections 3211 and 3221 of this title] shall apply only with respect

to compensation paid for services rendered after September 30,

1965."

Section 105(b)(4) of Pub. L. 89-97 provided that: "The amendments

made by this subsection [amending this section and sections 3211

and 3221 of this title] shall be effective with respect to

compensation paid for services rendered after December 31, 1965."

Amendment by section 111(c)(1) 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 [this chapter] 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.

EFFECTIVE DATE OF 1959 AMENDMENT

Section 202 of Pub. L. 86-28 provided that: "The amendments made

by section 201 [amending this section and sections 3202, 3211, and

3221 of this title] shall, except as otherwise provided in such

amendments, be effective as of the first day of the calendar month

next following the month in which this Act was enacted [May, 1959],

and shall apply only with respect to compensation paid after the

month of such enactment, for services rendered after such month of

enactment."

EFFECTIVE DATE OF 1954 AMENDMENT

Section 407 of act Aug. 31, 1954, as amended by act Oct. 22,

1986, Pub. L. 99-514, Sec. 2, 100 Stat. 2095, provided that: "The

amendments to the Internal Revenue Code of 1986 [formerly I.R.C.

1954] made by section 206 [amending this section and sections 3202,

3211, 3221, and 3231 of this title] shall become effective as if

enacted as a part of the Internal Revenue Code of 1986."

SEPARABILITY

Section 301 of Pub. L. 93-69 provided that: "If any provision of

this Act [amending this section, sections 3202, 3211, and 3221 of

this title, sections 228b, 228c, and 228e of Title 45, Railroads,

and section 15a of former Title 49, and enacting provisions set out

as notes under this section, and sections 228b, 228c, 228f, and

228o of Title 45] or the application thereof to any person or

circumstances should be held invalid, the remainder of such Act or

the application of such provision to other persons or circumstances

shall not be affected thereby."

PENALTIES AND INTEREST NOT ASSESSED FOR FAILURE TO MAKE TIMELY

PAYMENT DURING PERIOD JANUARY 1, 1982, TO JUNE 30, 1982, OF TAXES

ATTRIBUTABLE TO AMENDMENTS BY PUB. L. 97-123

For provision that no penalties or interest shall be assessed on

account of any failure to make timely payment of taxes imposed by

subsec. (b) of this section with respect to payments made for the

period Jan. 1, 1982, and ending June 30, 1982, to the extent that

such taxes are attributable to section 3 of Pub. L. 97-123 or the

amendments made by that section, see section 3(f) of Pub. L.

97-123, set out as a note under section 3101 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 24, 72, 275, 1402, 3202,

3231, 3241, 3502, 6051, 6053, 6205, 6413, 6652 of this title; title

45 sections 231, 231e, 231f-1, 231n-1.

-End-

-CITE-

26 USC Sec. 3202 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter A - Tax on Employees

-HEAD-

Sec. 3202. Deduction of tax from compensation

-STATUTE-

(a) Requirement

The taxes imposed by section 3201 shall be collected by the

employer of the taxpayer by deducting the amount of the taxes from

the compensation of the employee as and when paid. An employer who

is furnished by an employee a written statement of tips (received

in a calendar month) pursuant to section 6053(a) to which paragraph

(3) of section 3231(e) is applicable may deduct an amount

equivalent to such taxes with respect to such tips from any

compensation of the employee (exclusive of tips) under his control,

even though at the time such statement is furnished the total

amount of the tips included in statements furnished to the employer

as having been received by the employee in such calendar month in

the course of his employment by such employer is less than $20.

(b) Indemnification of employer

Every employer required under subsection (a) to deduct the tax

shall be liable for the payment of such tax and shall not be liable

to any person for the amount of any such payment.

(c) Special rule for tips

(1) In the case of tips which constitute compensation, subsection

(a) shall be applicable only to such tips as are included in a

written statement furnished to the employer pursuant to section

6053(a), and only to the extent that collection can be made by the

employer, at or after the time such statement is so furnished and

before the close of the 10th day following the calendar month (or,

if paragraph (3) applies, the 30th day following the quarter) in

which the tips were deemed paid, by deducting the amount of the tax

from such compensation of the employee (excluding tips, but

including funds turned over by the employee to the employer

pursuant to paragraph (2)) as are under control of the employer.

(2) If the taxes imposed by section 3201, with respect to tips

which are included in written statements furnished in any month to

the employer pursuant to section 6053(a), exceed the compensation

of the employee (excluding tips) from which the employer is

required to collect the taxes under paragraph (1), the employee may

furnish to the employer on or before the 10th day of the following

month (or, if paragraph (3) applies, on or before the 30th day of

the following quarter) an amount of money equal to the amount of

the excess.

(3) The Secretary may, under regulations prescribed by him,

authorize employers -

(A) to estimate the amount of tips that will be reported by the

employee pursuant to section 6053(a) in any quarter of the

calendar year,

(B) to determine the amount to be deducted upon each payment of

compensation (exclusive of tips) during such quarter as if the

tips so estimated constituted actual tips so reported, and

(C) to deduct upon any payment of compensation (other than

tips, but including funds turned over by the employee to the

employer pursuant to paragraph (2)) to such employee during such

quarter (and within 30 days thereafter) such amount as may be

necessary to adjust the amount actually deducted upon such

compensation of the employee during the quarter to the amount

required to be deducted in respect of tips included in written

statements furnished to the employer during the quarter.

(4) If the taxes imposed by section 3201 with respect to tips

which constitute compensation exceed the portion of such taxes

which can be collected by the employer from the compensation of the

employee pursuant to paragraph (1) or paragraph (3), such excess

shall be paid by the employee.

(d) Special rule for certain taxable group-term life insurance

benefits

(1) In general

In the case of any payment for group-term life insurance to

which this subsection applies -

(A) subsection (a) shall not apply,

(B) the employer shall separately include on the statement

required under section 6051 -

(i) the portion of the compensation which consists of

payments for group-term life insurance to which this

subsection applies, and

(ii) the amount of the tax imposed by section 3201 on such

payments, and

(C) the tax imposed by section 3201 on such payments shall be

paid by the employee.

(2) Benefits to which subsection applies

This subsection shall apply to any payment for group-term life

insurance to the extent -

(A) such payment constitutes compensation, and

(B) such payment is for coverage for periods during which an

employment relationship no longer exists between the employee

and the employer.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 431; Aug. 31, 1954, ch. 1164,

pt. II, Sec. 206(a), 68 Stat. 1040; Pub. L. 86-28, pt. II, Sec.

201(b), May 19, 1959, 73 Stat. 29; Pub. L. 88-133, title II, Sec.

202, Oct. 5, 1963,77 Stat. 221; Pub. L. 89-212, Secs. 2(a), 4,

Sept. 29, 1965, 79 Stat. 858, 861; Pub. L. 89-700, title III, Sec.

301(iii), (v), Oct. 30, 1966, 80 Stat. 1088; Pub. L. 93-69, title

I, Sec. 102(b), July 10, 1973, 87 Stat. 162; Pub. L. 94-455, title

XIX, Secs. 1903(a)(7), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1807,

1834; Pub. L. 98-76, title II, Sec. 225(a)(2), (c)(1)(A), (B),

(2)-(5), Aug. 12, 1983, 97 Stat. 425; Pub. L. 101-508, title V,

Sec. 5124(b), Nov. 5, 1990, 104 Stat. 1388-285.)

-MISC1-

AMENDMENTS

1990 - Subsec. (d). Pub. L. 101-508 added subsec. (d).

1983 - Subsec. (a). Pub. L. 98-76, Sec. 225(a)(2), (c)(1)(A),

(2), substituted "taxes imposed by section 3201" for "tax imposed

by section 3201", substituted "the amount of the taxes" for "the

amount of the tax", and "such taxes" for "such tax", and struck out

provisions that if an employee was paid compensation by more than

one employer for services rendered during any calendar month and

the aggregate of such compensation was in excess of an amount equal

to one-twelfth of the current maximum annual taxable "wages" as

defined in section 3121 for any month, the tax to be deducted by

each employer other than a subordinate unit of a national

railway-labor-organization employer from the compensation paid by

him to the employee with respect to such month would be that

proportion of the tax with respect to such compensation paid by all

such employers which the compensation paid by him to the employee

for services rendered during such month bears to the total

compensation paid by all such employers to such employee for

services rendered during such month; and that in the event that the

compensation so paid by such employers to the employee for services

rendered during such month was less than an amount equal to

one-twelfth of the current maximum annual taxable "wages" as

defined in section 3121 for any month, each subordinate unit of a

national railway-labor-organization employer would deduct such

proportion of any additional tax as the compensation paid by such

employer to such employee for services rendered during such month

bears to the total compensation paid by all such employers to such

employee for services rendered during such month.

Subsec. (c)(2). Pub. L. 98-76, Sec. 225(c)(1)(B), (3), (5),

substituted "taxes imposed by section 3201" for "tax imposed by

section 3201", "the taxes under paragraph (1)" for "the tax under

paragraph (1)", and "exceed" for "exceeds".

Subsec. (c)(4). Pub. L. 98-76, Sec. 225(c)(1)(B), (4), (5),

substituted "taxes imposed by section 3201" for "tax imposed by

section 3201", "such taxes" for "such tax", and "exceed" for

"exceeds".

1976 - Subsec. (a). Pub. L. 94-455, Sec. 1903(a)(7)(A), struck

out provisions relating to the September 30, 1973, qualification on

the applicability of provisions of this subsection and "of the

Internal Revenue Code of 1954" before "for any month" wherever

appearing.

Subsec. (b). Pub. L. 94-455, Sec. 1903(a)(7)(B), struck out

"made" after "to deduct the tax shall be".

Subsec. (c)(3). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out

"or his delegate" after "Secretary".

1973 - Subsec. (a). Pub. L. 93-69, in second sentence reading "If

an employee . . .", substituted "1973" for "1965" wherever

appearing, struck out "(i) $450, or (ii)" before "an amount equal

to" in two places, and struck out ", whichever is greater," after

"Internal Revenue Code of 1954" in two places.

1966 - Subsec. (a). Pub. L. 89-700 substituted "after September

30, 1965" for "after the month in which this provision was amended

in 1959" in six places, and "(i) $450, or (ii) an amount equal to

one-twelfth of the current maximum annual taxable 'wages' as

defined in section 3121 of the Internal Revenue Code of 1954,

whichever is greater, for any month after September 30, 1965" for

"$400 for any calendar month before the calendar month next

following the month in which this provision was amended in 1963, or

$450 for any calendar month after the month in which this provision

was so amended and before the calendar month next following the

calendar month in which this provision was amended in 1965, or (i)

$450, or (ii) an amount equal to one-twelfth of the current maximum

annual taxable 'wages' as defined in section 3121 of the Internal

Revenue Code of 1954, whichever is greater, for any month after the

month in which this provision was so amended" in two places.

1965 - Subsec. (a). Pub. L. 89-212, Secs. 2(a)(1), 4, inserted

sentence permitting an employer who is furnished by an employee a

written statement of tips pursuant to section 6053(a) to which par.

(3) of section 3231(e) is applicable to deduct an amount equivalent

to such tax with respect to such tips from any compensation of the

employee under his control, even though at the time such statement

is furnished the total amount of the tips included in statements

furnished to the employer as having been received by the employee

in such calendar month in the course of his employment by such

employer is less than $20, and inserted "and before the calendar

month next following the calendar month in which this provision was

amended in 1965, or (i) $450, or (ii) an amount equal to

one-twelfth of the current maximum annual taxable 'wages' as

defined in section 3121, whichever is greater, for any month after

the month in which this provision was so amended" in two places.

Subsec. (c). Pub. L. 89-212, Sec. 2(a)(2), added subsec. (c).

1963 - Subsec. (a). Pub. L. 88-133 limited existing taxable

compensation base of $400 to any calendar month before Nov. 1963

and increased such base to $450 for any calendar month after Oct.

1963.

1959 - Subsec. (a). Pub. L. 86-28 substituted "after the month in

which this provision was amended in 1959" for "after 1954" and for

"after December 31, 1954" in five places, and "$400" for "$350" in

two places.

1954 - Subsec. (a). Act Aug. 31, 1954, substituted "$350" for

"$300" wherever appearing.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by Pub. L. 101-508 applicable to coverage provided

after Dec. 31, 1990, see section 5124(c) of Pub. L. 101-508, set

out as a note under section 3102 of this title.

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 98-76 applicable to remuneration paid after

Dec. 31, 1984, see section 227(a) of Pub. L. 98-76, set out as a

note under section 3201 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by section 1903(a)(7) of Pub. L. 94-455 applicable with

respect to compensation paid for services rendered after Dec. 31,

1976, see section 1903(d) of Pub. L. 94-455, set out as a note

under section 3201 of this title.

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-69 effective Oct. 1, 1973, and applicable

only with respect to compensation paid for services rendered on or

after Oct. 1, 1973; and applicable to railway labor organization

covered by a private supplemental pension plan as of Oct. 1, 1973,

and subject to a moratorium agreed to on or before Mar. 8, 1973,

for changes in pay rates, on the earlier of (1) date of expiration

of such moratorium, or (2) date as of which the railway labor

organization through collective bargaining agreement makes

amendment applicable, see section 109(b) of Pub. L. 93-69, set out

as a note under section 3201 of this title.

EFFECTIVE DATE OF 1965 AMENDMENT

Amendment by section 2(a) of Pub. L. 89-212 effective only with

respect to tips received after 1965, and amendment by section 4 of

Pub. L. 89-212 effective only with respect to calendar months after

the month in which Pub. L. 89-212 is enacted, see section 6 of Pub.

L. 89-212, set out as a note under section 3201 of this title.

EFFECTIVE DATE OF 1959 AMENDMENT

Amendment by Pub. L. 86-28 effective, except as otherwise

provided, first day of calendar month next following May 1959, see

section 202 of Pub. L. 86-28, set out as a note under section 3201

of this title.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 31, 1954, effective as if enacted as a part

of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], see

section 407 of act Aug. 31, 1954, as amended, set out as a note

under section 3201 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3402, 3505, 6053 of this

title.

-End-

-CITE-

26 USC Subchapter B - Tax on Employee Representatives 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter B - Tax on Employee Representatives

-HEAD-

SUBCHAPTER B - TAX ON EMPLOYEE REPRESENTATIVES

-MISC1-

Sec.

3211. Rate of tax.

3212. Determination of compensation.

-End-

-CITE-

26 USC Sec. 3211 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter B - Tax on Employee Representatives

-HEAD-

Sec. 3211. Rate of tax

-STATUTE-

(a) Tier 1 tax

In addition to other taxes, there is hereby imposed on the income

of each employee representative a tax equal to the applicable

percentage of the compensation received during any calendar year by

such employee representative for services rendered by such employee

representative. For purposes of the preceding sentence, the term

"applicable percentage" means the percentage equal to the sum of

the rates of tax in effect under subsections (a) and (b) of section

3101 and subsections (a) and (b) of section 3111 for the calendar

year.

(b) Tier 2 tax

(1) In general

In addition to other taxes, there is hereby imposed on the

income of each employee representative a tax equal to the

applicable percentage of the compensation received during any

calendar year by such employee representatives for services

rendered by such employee representative.

(2) Applicable percentage

For purposes of paragraph (1), the term "applicable percentage"

means -

(A) 14.75 percent in the case of compensation received during

2002,

(B) 14.20 percent in the case of compensation received during

2003, and

(C) in the case of compensation received during any calendar

year after 2003, the percentage determined under section 3241

for such calendar year.

(c) Cross reference

For application of different contribution bases with respect

to the taxes imposed by subsections (a) and (b), see section

3231(e)(2).

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 432; Aug. 31, 1954, ch. 1164,

pt. II, Sec. 206(a), 68 Stat. 1040; Pub. L. 86-28, pt. II, Sec.

201(c), May 19, 1959, 73 Stat. 29; Pub. L. 88-133, title II, Sec.

201, Oct. 5, 1963, 77 Stat. 221; Pub. L. 89-97, title I, Secs.

105(b)(2), 111(c)(2), July 30, 1965, 79 Stat. 335, 342; Pub. L.

89-212, Secs. 4, 5(b), Sept. 29, 1965, 79 Stat. 861; Pub. L.

89-699, title III, Sec. 301 (b), (d), Oct. 30, 1966, 80 Stat. 1078;

Pub. L. 89-700, title III, Sec. 301(v), (vi), Oct. 30, 1966, 80

Stat. 1088, 1089; Pub. L. 91-215, Sec. 4, Mar. 17, 1970, 84 Stat.

70; Pub. L. 93-69, title I, Sec. 102(c), July 10, 1973, 87 Stat.

162; Pub. L. 94-93, title II, Sec. 202, Aug. 9, 1975, 89 Stat. 466;

Pub. L. 94-455, title XIX, Sec. 1903(a)(8), Oct. 4, 1976, 90 Stat.

1807; Pub. L. 97-34, title VII, Sec. 741(b), Aug. 13, 1981, 95

Stat. 347; Pub. L. 98-76, title II, Secs. 211(c), 223, Aug. 12,

1983, 97 Stat. 419, 421; Pub. L. 101-508, title V, Sec. 5125(b),

Nov. 5, 1990, 104 Stat. 1388-285; Pub. L. 107-90, title II, Secs.

203(a), 204(b), Dec. 21, 2001, 115 Stat. 891.)

-MISC1-

AMENDMENTS

2001 - Subsec. (a). Pub. L. 107-90, Sec. 204(b), added subsec.

(a) and struck out former subsec. (a), which related to imposition

of tier 1 and 2 taxes.

Subsec. (b). Pub. L. 107-90, Sec. 204(b), added subsec. (b).

Pub. L. 107-90, Sec. 203(a), struck out subsec. (b) which read as

follows: "In addition to other taxes, there is hereby imposed on

the income of each employee representative a tax at a rate equal to

the rate of excise tax imposed on every employer, provided for in

section 3221(c), for each man-hour for which compensation is paid

to him for services rendered as an employee representative."

Subsec. (c). Pub. L. 107-90, Sec. 204(b), added subsec. (c).

1990 - Subsec. (a). Pub. L. 101-508 substituted "applicable" for

"following" before "percentage of the" and provision defining the

term "applicable percentage" for provision specifying that in the

case of compensation received during 1985 the rate of tax was 14.10

percent, for 1986 or 1987 the rate was 14.30 percent, for 1988 or

1989 the rate was 15.02 percent, and for 1990 or thereafter the

rate was 15.30 percent.

1983 - Subsec. (a). Pub. L. 98-76, Sec. 223, substituted

provisions imposing a two tiered tax on each employee

representative equal to the percentage of the compensation received

during any calendar year by such employee representative for

services rendered as is set out in accompanying tables, for

provisions that had imposed on each employee representative a tax

equal to 12.75 percent plus the sum of the rates of tax imposed

with respect to wages by sections 3101(a), 3101(b), 3111(a), and

3111(b) of so much of the compensation paid in any calendar month

to such employee representative for services rendered by him as was

not in excess of an amount equal to one-twelfth of the current

maximum annual taxable "wage" as defined in section 3121 for any

month.

Pub. L. 98-76, Sec. 211(c), substituted "12.75 percent" for

"11.75 percent".

1981 - Subsec. (a). Pub. L. 97-34 substituted "11.75" for "9.5".

1976 - Subsec. (a). Pub. L. 94-455 substituted "3111(a), and

3111(b)" for "3111(a), 3111(b)", struck out "of the Internal

Revenue Code of 1954" before "of so much of the compensation",

"after September 30, 1973," after "rendered by him", "of the

Internal Revenue Code of 1954" after "as defined in section 3121",

and "after September 30, 1973" after "for any month".

1975 - Subsec. (a). Pub. L. 94-93 inserted "in any calendar

month" after "compensation paid".

1973 - Subsec. (a). Pub. L. 93-69 substituted new tax rate

provisions on income of employee representatives for services

rendered after Sept. 30, 1973, for former provisions which

prescribed 12 1/2 , 13, 14, 14 1/2 , and 15 percent on income for

services rendered after Sept. 30, 1965, Dec. 31, 1965, Dec. 31,

1966, Dec. 31, 1967, and Dec. 31, 1968, respectively, as is not in

excess of (i) $450, or (ii) an amount equal to one-twelfth of the

current maximum annual taxable "wages" as defined in section 3121

of the Internal Revenue Code of 1954, whichever is greater, for any

month after September 30, 1965: Provided, That the rate of tax

imposed by this section shall be increased, with respect to

compensation paid for services rendered after September 30, 1965,

by a number of percentage points (including fractional points)

equal at any given time to twice the number of percentage points

(including fractional points) by which the rate of the tax imposed

with respect to wages by section 3101(a) plus the rate imposed by

section 3101(b) at such time exceeds 2 3/4 percent (the rate

provided by paragraph (2) of section 3101 as amended by the Social

Security Amendments of 1956).

1970 - Subsec. (b). Pub. L. 91-215 substituted the rate of excise

tax imposed on every employer under section 3221(c) of this title

for a flat 2-cents per man hour tax as the rate for additional

taxes imposed on the income of employee representatives for each

man hour of compensation paid.

1966 - Pub. L. 89-700 substituted "rendered after September 30,

1965" for "rendered after December 31, 1964", and "(i) $450, or

(ii) an amount equal to one-twelfth of the current maximum annual

taxable 'wages' as defined in section 3121 of the Internal Revenue

Code of 1954, whichever is greater, for any month after September

30, 1965" for "$400 for any calendar month before the calendar

month next following the month in which this provision was amended

in 1963, or $450 for any calendar month after the month in which

this provision was so amended and before the calendar month next

following the calendar month in which this provision was amended in

1965, or (i) $450, or (ii) an amount equal to one-twelfth of the

current maximum annual taxable 'wages' as defined in section 3121

of the Internal Revenue Code of 1954, whichever is greater, for any

month after the month in which this provision was so amended".

Pub. L. 89-699, Sec. 301(b), (d), designated existing provisions

as subsec. (a), and substituted "14 percent" for "13 1/2 percent"

in subd. (3), "14 1/2 percent" for "14 percent" in subd. (4), and

"15 percent" for "14 1/2 percent" in subd. (5).

Subsec. (b). Pub. L. 89-699, Sec. 301(d), added subsec. (b).

1965 - Pub. L. 89-212 substituted pars. (1) to (5) for former

pars. (1) and (2) which imposed a tax equal to 13 1/2 percent of

so much of the compensation paid to such employee representative

for services rendered by him after the month in which this

provision was amended in 1959, and before Jan. 1, 1962, and 14 1/2

percent of so much of the compensation paid to such employee

representative for services rendered by him after Dec. 31, 1961,

and inserted "and before the calendar month next following the

calendar month in which this provision was amended in 1965, or (i)

$450, or (ii) an amount equal to one-twelfth of the current maximum

annual taxable 'wages' as defined in section 3121, whichever is

greater, for any month after the month in which this provision was

so amended".

Pub. L. 89-97 substituted "the rate of the tax imposed with

respect to wages by section 3101(a) at such time exceeds 2 3/4

percent (the rate provided by paragraph (2) of section 3101 as

amended by the Social Security Amendments of 1956)" for "the rate

of the tax imposed with respect to wages by section 3101 at such

time exceeds the rate provided by paragraph (2) of such section

3101 as amended by the Social Security Amendments of 1956" and

inserted "plus the rate imposed by section 3101(b)" after "section

3101(a)", respectively.

1963 - Pub. L. 88-133 limited the existing taxable compensation

base of $400 to any calendar month before Nov. 1963 and increased

such base to $450 for any calendar month after Oct. 1963.

1959 - Pub. L. 86-28 increased the tax from 12 1/2 percent of

the compensation not in excess of $350 for any calendar month to 13

1/2 percent of the compensation not in excess of $400 for any

calendar month for services rendered before Jan. 1, 1962, and to 14

1/2 percent for services rendered after Dec. 31, 1961, and

required an increase in the rate of tax with respect to

compensation paid for services rendered after December 31, 1964, by

a number of percentage points equal at any given time to twice the

number of percentage points by which the rate of tax imposed by

section 3101 of this title at such time exceeds the rate provided

by par. (2) of such section 3101 as amended by the Social Security

Amendments of 1956.

1954 - Act Aug. 31, 1954, substituted "$350" for "$300".

EFFECTIVE DATE OF 2001 AMENDMENT

Pub. L. 107-90, title II, Sec. 203(c), Dec. 21, 2001, 115 Stat.

891, provided that: "The amendments made by this section [amending

this section and section 3221 of this title] shall apply to

calendar years beginning after December 31, 2001."

Amendment by section 204(b) of Pub. L. 107-90 applicable to

calendar years beginning after Dec. 31, 2001, see section 204(f) of

Pub. L. 107-90, set out as an Effective and Termination Dates of

2001 Amendments note under section 24 of this title.

EFFECTIVE AND TERMINATION DATES OF 1983 AMENDMENT

Amendment by section 211(c) of Pub. L. 98-76 applicable to

compensation paid for services rendered after Dec. 31, 1983, and

before Jan. 1, 1985, see section 212 of Pub. L. 98-76, set out as a

note under section 3201 of this title.

Amendment by section 223 of Pub. L. 98-76 applicable to

remuneration paid after Dec. 31, 1984, see section 227(a) of Pub.

L. 98-76, set out as a note under section 3201 of this title.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-34 applicable to compensation paid for

services rendered after Sept. 30, 1981, see section 741(e) of Pub.

L. 97-34, set out as a note under section 3201 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 applicable with respect to

compensation paid for services rendered after Dec. 31, 1976, see

section 1903(d) of Pub. L. 94-455, set out as a note under section

3101 of this title.

EFFECTIVE DATE OF 1975 AMENDMENT

Amendment by Pub. L. 94-93 applicable for taxable years ending on

or after Aug. 9, 1975, and for taxable years ending before Aug. 9,

1975, as to which the period for assessment and collection of tax

or the filing of a claim for credit or refund has not expired on

Aug. 9, 1975, see section 207 of Pub. L. 94-93, set out as a note

under section 3201 of this title.

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-69 effective Oct. 1, 1973, and applicable

only with respect to compensation paid for services rendered on or

after Oct. 1, 1972; and applicable to railway labor organization

covered by private supplemental pension plan as of Oct. 1, 1973,

and subject to a moratorium, agreed to on or before Mar. 8, 1973,

for changes in pay rates, on the earlier of (1) date of expiration

of such moratorium, or (2) date as of which the railway labor

organization through collective bargaining agreement makes

amendment applicable, see section 109(b) of Pub. L. 93-69, set out

as a note under section 3201 of this title.

EFFECTIVE DATE OF 1966 AMENDMENT

Section 301(f) of Pub. L. 89-699, as amended by section 8 of Pub.

L. 91-215, provided that: "The amendments made by subsections (d)

and (e) of this section [amending this section and section 3221 of

this title] shall be effective with respect to man-hours, beginning

with the first month following enactment of this Act [Oct. 30,

1966], for which compensation is paid."

EFFECTIVE DATE OF 1965 AMENDMENTS

Amendment by section 4 of Pub. L. 89-212 effective only with

respect to calendar months after month in which Pub. L. 89-212 is

enacted [September 1965], and amendment by section 5(b) of Pub. L.

89-212 effective only with respect to compensation paid for

services rendered after Sept. 30, 1965, see section 6 of Pub. L.

89-212, set out as a note under section 3201 of this title.

Amendment by section 105(b)(2) of Pub. L. 89-97 effective with

respect to compensation paid for services rendered after Dec. 31,

1965, see section 105(b)(4) of Pub. L. 89-97, set out as a note

under section 3201 of this title.

Amendment by section 111(c)(2) 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 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 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.

EFFECTIVE DATE OF 1959 AMENDMENT

Amendment by Pub. L. 86-28 effective, except as otherwise

provided, first day of calendar month next following May 1959, see

section 202 of Pub. L. 86-28, set out as a note under section 3201

of this title.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 31, 1954, effective as if enacted as a part

of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], see

section 407 of act Aug. 31, 1954, as amended, set out as a note

under section 3201 of this title.

SEPARABILITY

Section 9 of Pub. L. 91-215 provided that: "If any provision of

this Act [amending this section, section 3221 of this title, and

sections 228c and 228o of Title 45, Railroads, enacting provisions

set out as notes under section 3221 of this title and sections 228c

and 228o of Title 45, and amending provisions set out as notes

under this section] or the application thereof to any person or

circumstances is held invalid, the remainder of this Act, and the

application of such provisions to other persons or circumstances,

shall not be affected thereby."

PENALTIES AND INTEREST NOT ASSESSED FOR FAILURE TO MAKE TIMELY

PAYMENT DURING PERIOD JANUARY 1, 1982, TO JUNE 30, 1982, OF TAXES

ATTRIBUTABLE TO AMENDMENTS BY PUB. L. 97-123

For provision that no penalties or interest shall be assessed on

account of any failure to make timely payment of taxes imposed by

this section with respect to payments made for the period Jan. 1,

1982, and ending June 30, 1982, to the extent that such taxes are

attributable to section 3 of Pub. L. 97-123 or the amendments made

by that section, see section 3(f) of Pub. L. 97-123, set out as a

note under section 3101 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 24, 72, 275, 1402, 3231,

3241, 3502, 6051 of this title; title 45 sections 231, 231e,

231f-1, 231n-1.

-End-

-CITE-

26 USC Sec. 3212 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter B - Tax on Employee Representatives

-HEAD-

Sec. 3212. Determination of compensation

-STATUTE-

The compensation of an employee representative for the purpose of

ascertaining the tax thereon shall be determined in the same manner

and with the same effect as if the employee organization by which

such employee representative is employed were an employer as

defined in section 3231(a).

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 432.)

-End-

-CITE-

26 USC Subchapter C - Tax on Employers 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter C - Tax on Employers

-HEAD-

SUBCHAPTER C - TAX ON EMPLOYERS

-MISC1-

Sec.

3221. Rate of tax.

-End-

-CITE-

26 USC Sec. 3221 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter C - Tax on Employers

-HEAD-

Sec. 3221. Rate of tax

-STATUTE-

(a) Tier 1 tax

In addition to other taxes, there is hereby imposed on every

employer an excise tax, with respect to having individuals in his

employ, equal to the applicable percentage of compensation paid

during any calendar year by such employer for services rendered to

such employer. For purposes of the preceding sentence, the term

"applicable percentage" means the percentage equal to the sum of

the rates of tax in effect under subsections (a) and (b) of section

3111 for the calendar year.

(b) Tier 2 tax

(1) In general

In addition to other taxes, there is hereby imposed on every

employer an excise tax, with respect to having individuals in his

employ, equal to the applicable percentage of the compensation

paid during any calendar year by such employer for services

rendered to such employer.

(2) Applicable percentage

For purposes of paragraph (1), the term "applicable percentage"

means -

(A) 15.6 percent in the case of compensation paid during

2002,

(B) 14.2 percent in the case of compensation paid during

2003, and

(C) in the case of compensation paid during any calendar year

after 2003, the percentage determined under section 3241 for

such calendar year.

(c) Cross reference

For application of different contribution bases with respect

to the taxes imposed by subsections (a) and (b), see section

3231(e)(2).

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 433; Aug. 31, 1954, ch. 1164,

pt. II, Sec. 206(a), 68 Stat. 1040; Pub. L. 86-28, pt. II, Sec.

201(d), May 19, 1959, 73 Stat. 29; Pub. L. 88-133, title II, Sec.

202, Oct. 5, 1963, 77 Stat. 221; Pub. L. 89-97, title I, Secs.

105(b)(3), 111(c)(3), July 30, 1965, 79 Stat. 335, 342; Pub. L.

89-212, Secs. 4, 5(c), Sept. 29, 1965, 79 Stat. 861, 862; Pub. L.

89-699, title III, Sec. 301(c), (e), Oct. 30, 1966, 80 Stat. 1078;

Pub. L. 89-700, title III, Secs. 301(iii), (v), (vi), 302, Oct. 30,

1966, 80 Stat. 1088, 1089; Pub. L. 91-215, Sec. 5(a), (b)(1), Mar.

17, 1970, 84 Stat. 71; Pub. L. 93-69, title I, Sec. 102(d)-(f),

July 10, 1973, 87 Stat. 162, 163; Pub. L. 93-445, title V, Sec.

501, Oct. 16, 1974, 88 Stat. 1359; Pub. L. 94-93, title II, Sec.

203, Aug. 9, 1975, 89 Stat. 466; Pub. L. 94-455, title XIX, Secs.

1903(a)(9), 1906(b)(13)(G), Oct. 4, 1976, 90 Stat. 1808, 1835; Pub.

L. 97-34, title VII, Sec. 741(c), Aug. 13, 1981, 95 Stat. 347; Pub.

L. 98-76, title II, Secs. 211(b), 222, Aug. 12, 1983, 97 Stat. 419,

420; Pub. L. 100-203, title IX, Sec. 9032(a), Dec. 22, 1987, 101

Stat. 1330-296; Pub. L. 101-508, title V, Sec. 5125(c), Nov. 5,

1990, 104 Stat. 1388-286; Pub. L. 107-90, title II, Secs. 203(b),

204(a), Dec. 21, 2001, 115 Stat. 891.)

-MISC1-

AMENDMENTS

2001 - Subsec. (b). Pub. L. 107-90, Sec. 204(a), amended heading

and text of subsec. (b) generally. Prior to amendment, text read as

follows: "In addition to other taxes, there is hereby imposed on

every employer an excise tax, with respect to having individuals in

his employ, equal to 16.10 percent of the compensation paid during

any calendar year by such employer for services rendered to such

employer."

Subsecs. (c) to (e). Pub. L. 107-90, Sec. 203(b), redesignated

subsec. (e) as (c) and struck out former subsecs. (c) and (d) which

provided, in subsec. (c), for imposition of excise tax on every

employer, with respect to having individuals in his employ, for

each man-hour for which compensation was paid by such employer for

services rendered to him during any calendar quarter, and for

credit against such tax of amount equivalent in each month to the

aggregate amount of reductions in supplemental annuities accruing

in such month to employees of such employer, and, in subsec. (d),

that such tax would not apply to an employer with respect to

employees covered by a supplemental pension plan which is

established pursuant to an agreement reached through collective

bargaining between the employer and employees.

1990 - Subsec. (a). Pub. L. 101-508 substituted "applicable" for

"following" before "percentage of" and provision defining

"applicable percentage" for provision specifying the tax rate to be

7.05 percent, 7.15 percent, 7.51 percent, and 7.65 percent in the

case of compensation paid during 1985, 1986 or 1987, 1988 or 1989,

or 1990 or thereafter, respectively.

1987 - Subsec. (b). Pub. L. 100-203 amended subsec. (b)

generally. Prior to amendment, subsec. (b) read as follows: "In

addition to other taxes, there is hereby imposed on every employer

an excise tax, with respect to having individuals in his employ,

equal to the following percentage of compensation paid during any

calendar year by such employer for services rendered to such

employer:

"In the case of compensation

paid during: The rate shall

be:

1985 13.75

1986 or thereafter 14.75."

1983 - Subsec. (a). Pub. L. 98-76, Sec. 222(a), in amending

subsec. (a) generally, substituted provisions imposing an excise

tax on employers, with respect to having individuals in his employ,

equal to a percentage of compensation paid as set out in an

accompanying table, for provisions which imposed an excise tax on

employers, with respect to having individuals in his employ, equal

to 12.75 percent of so much of the compensation paid in any

calendar month by such employer for services rendered to him as was

not in excess of an amount equal to one-twelfth of the current

maximum annual taxable "wages" as defined in section 3121 for any

month, with certain exceptions dealing with multiple employers.

Pub. L. 98-76, Sec. 211(b), substituted "12.75 percent" for

"11.75 percent".

Subsec. (b). Pub. L. 98-76, Sec. 222(a), in amending subsec. (b)

generally, substituted provisions imposing a second tier excise tax

on employers equal to a percentage of compensation paid as set out

in an accompanying table, for provisions that the rate of tax

imposed by former subsec. (a) would be increased by the rate of tax

imposed with respect to wages by section 3111(a) plus the rate

imposed by section 3111(b).

Subsec. (e). Pub. L. 98-76, Sec. 222(b), added subsec. (e).

1981 - Subsec. (a). Pub. L. 97-34 substituted in first sentence

"11.75" for "9.5".

1976 - Subsec. (a). Pub. L. 94-455, Secs. 1903(a)(9)(A),

1906(b)(13)(G), struck out provisions relating to the September 30,

1973 qualification on the applicability of provisions of this

subsection, "of the Internal Revenue Code of 1954" after "as

defined in section 3121" wherever appearing, and "of the Treasury"

after "to the Secretary".

Subsec. (b). Pub. L. 94-455, Sec. 1903(a)(9)(B), struck out ",

with respect to compensation paid for services rendered after

September 30, 1973," after "shall be increased", "of the Internal

Revenue Code of 1954" after "by section 3111(a)" and "of such Code"

after "by section 3111(b)".

Subsec. (c). Pub. L. 94-455, Secs. 1903(a)(9)(C), 1906(b)(13)(G),

struck out "(1) at the rate of two cents for the period beginning

November 1, 1966, and ending March 31, 1970, and (2) commencing

April 1, 1970," after "during any calendar quarter," , "commencing

with the quarter beginning April 1, 1970" after "required for each

calendar quarter", "of the Treasury" after "representatives, and

the Secretary" and "of the Treasury" after "shall certify to the

Secretary".

1975 - Subsec. (a). Pub. L. 94-93 substituted "compensation paid

in any calendar month by such employer" for "compensation paid by

such employer".

1974 - Subsec. (c). Pub. L. 93-445, Sec. 501(a), struck out "for

appropriation to the Railroad Retirement Supplemental Account

provided for in section 15(b) of the Railroad Retirement Act of

1937" after "commencing April 1, 1970, at such rate as will make

available", substituted "at the level provided under section 3(j)

of the Railroad Retirement Act of 1937 as in effect on December 31,

1974" for "under section 3(j) of such Act", and inserted "or

section 2(h)(2) of the Railroad Retirement Act of 1974" after

"section 3(j)(2) of the Railroad Retirement Act of 1937".

Subsec. (d). Pub. L. 93-445, Sec. 501(b), substituted "section

2(b) of the Railroad Retirement Act of 1974" for "section 3(j) of

the Railroad Retirement Act of 1937" and "section 2(b) of such Act"

for "section 3(j) of such Act".

1973 - Subsec. (a). Pub. L. 93-69, Sec. 102(d), (e), substituted

new tax rate provisions on employers for services rendered after

Sept. 30, 1973, for former provisions which prescribed 6 1/4 , 6

1/2 , 7, 7 1/4 , and 7 1/2 percent on income for services rendered

after Sept. 30, 1965; Dec. 31, 1965; Dec. 31, 1966; Dec. 31, 1967;

and Dec. 31, 1968, respectively, as is, with respect to any

employee for any calendar month, not in excess of (i) $450, or (ii)

an amount equal to one-twelfth of the current maximum annual

taxable "wages" as defined in section 3121 of the Internal Revenue

Code of 1954, whichever is greater, for any month after Sept. 30,

1965, and, in first sentence, substituted "1973" for "1965"

wherever appearing, struck out "(i) $450, or (ii)" before "an

amount equal to" in two places, and struck out ", whichever is

greater," after "Internal Revenue Code of 1954" in two places,

respectively.

Subsec. (b). Pub. L. 93-69, Sec. 102(f), substituted "1973" for

"1965" and "by the rate of tax imposed with respect to wages by

section 3111(a) of the Internal Revenue Code of 1954 plus the rate

imposed by section 3111(b) of such Code", for "by a number of

percentage points (including fractional points) equal at any given

time to the number of percentage points (including fractional

points) by which the rate of the tax imposed with respect to wages

by section 3111(a) plus the rate imposed by section 3111(b) at such

time exceeds 2 3/4 percent (the rate provided by paragraph (2) of

section 3111 as amended by the Social Security Amendments of

1956)".

1970 - Subsec. (c). Pub. L. 91-215, Sec. 5(a), provided a

variable standard of taxation on employers for services rendered

them during any calendar quarter at the existing 2 cent rate for

each man-hour of services for the period from Nov. 1, 1966 to Mar.

31, 1970, and thereafter at such rates as will permit supplemental

annuity payments under section 228c(j) of this title, and

authorized the Railroad Retirement Board to make the necessary

determination of rates, and made it its duty to publish notice of

such determinations in the Federal Register.

Subsec. (d). Pub. L. 91-215, Sec. 5(b)(1), added subsec. (d).

1966 - Subsec. (a). Pub. L. 89-700, Secs. 301(iii), (v), 302,

substituted "after September 30, 1965" for "after the month in

which this provision was amended in 1959" in six places, and "(i)

$450, or (ii) an amount equal to one-twelfth of the current maximum

annual taxable 'wages' as defined in section 3121 of the Internal

Revenue Code of 1954, whichever is greater, for any month after

September 30, 1965" for "400 for any calendar month before the

calendar month next following the month in which this provision was

amended in 1963, or $450 for any calendar month after the month in

which this provision was so amended and before the calendar month

next following the calendar month in which this provision was

amended in 1965, or (i) $450, or (ii) an amount equal to

one-twelfth of the current maximum annual taxable 'wages' as

defined in section 3121 of the Internal Revenue Code of 1954,

whichever is greater, for any month after the month in which this

provision was so amended" in four places, and inserted sentence

providing that where compensation for services rendered in a month

is paid by two or more employers, one of the employers may, by

notice to the Secretary, and by agreement with the other employer,

elect for the tax imposed by section 3201 and this section to apply

to all of the compensation paid by such employer for such month as

does not exceed the maximum amount of compensation in respect to

which taxes are imposed by section 3201 and this section; and in

such a case the liability of the other employer shall be limited to

the difference, if any, between the compensation paid by the

electing employer and the maximum amount of compensation to which

section 3201 and this section apply.

Pub. L. 89-699, Sec. 301(c), substituted "7 percent" for "6 3/4

percent" in subd. (3), "7 1/4 percent" for "7 percent" in subd.

(4), and "7 1/2 percent" for "7 1/4 percent" in subd. (5).

Subsec. (b). Pub. L. 89-700, Sec. 301(vi), substituted "after

September 30, 1965" for "after December 31, 1964".

Subsec. (c). Pub. L. 89-699 added subsec. (c).

1965 - Subsec. (a). Pub. L. 89-212 substituted pars. (1) to (5)

for former pars. (1) and (2) which imposed an excise tax equal to 6

3/4 percent of so much of the compensation paid by such employer

for services rendered to him after the month in which this

provision was amended in 1959, and before Jan. 1, 1962, and 7 1/4

percent of so much of the compensation paid by such employer for

services rendered to him after Dec. 31, 1961, and inserted "and

before the calendar month next following the calendar month in

which this provision was amended in 1965, or (i) $450, or (ii) an

amount equal to one-twelfth of the current maximum annual taxable

'wages' as defined in section 3121, whichever is greater, for any

month after the month in which this provision was so amended"

wherever appearing.

Subsec. (b). Pub. L. 89-97 substituted "the rate of the tax

imposed with respect to wages by section 3111(a) at such time

exceeds 2 3/4 percent (the rate provided by paragraph (2) of

section 3111 as amended by the Social Security Amendments of 1956)"

for "the rate of the tax imposed with respect to wages by section

3111 at such time exceeds the rate provided by paragraph (2) of

such section 3111 as amended by the Social Security Amendments of

1956" and inserted "plus the rate imposed by section 3111(b)" after

"section 3111(a)", respectively.

1963 - Subsec. (a). Pub. L. 88-133 limited the existing taxable

compensation base of $400 to any calendar month before Nov. 1963

and increased such base to $450 for any calendar month after Oct.

1963.

1959 - Subsec. (a). Pub. L. 86-28, Sec. 201(d)(1), (2)(A), (B),

designated former provisions of section as subsec. (a), increased

the tax from 6 1/4 percent of the compensation not in excess of

$350 for any calendar month to 6 3/4 percent of the compensation

not in excess of $400 for any calendar month for services rendered

before Jan. 1, 1962, and to 7 1/4 percent for services rendered

after Dec. 31, 1961, and substituted "after the month in which this

provision was amended in 1959" for "after 1954" and for "after

December 31, 1954" in six places, "not more than $400" for "not

more than $350", and "less than $400" for "less than $350".

Subsec. (b). Pub. L. 86-28, Sec. 201(d)(2)(C), added subsec. (b).

1954 - Act Aug. 31, 1954, substituted "$350" for "$300" wherever

appearing.

EFFECTIVE DATE OF 2001 AMENDMENT

Amendment by section 203(b) of Pub. L. 107-90 applicable to

calendar years beginning after Dec. 31, 2001, see section 203(c) of

Pub. L. 107-90, set out as a note under section 3211 of this title.

Amendment by section 204(a) of Pub. L. 107-90 applicable to

calendar years beginning after Dec. 31, 2001, see section 204(f) of

Pub. L. 107-90, set out as an Effective and Termination Dates of

2001 Amendments note under section 24 of this title.

EFFECTIVE DATE OF 1987 AMENDMENT

Section 9032(b) of Pub. L. 100-203 provided that: "The amendments

made by this section [amending this section] shall apply with

respect to compensation paid after December 31, 1987."

EFFECTIVE AND TERMINATION DATES OF 1983 AMENDMENT

Amendment by section 211(b) of Pub. L. 98-76 applicable to

compensation paid for services rendered after Dec. 31, 1983, and

before Jan. 1, 1985, see section 212 of Pub. L. 98-76, set out as a

note under section 3201 of this title.

Amendment by section 222 of Pub. L. 98-76 applicable to

remuneration paid after Dec. 31, 1984, see section 227(a) of Pub.

L. 98-76, set out as a note under section 3201 of this title.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-34 applicable to compensation paid for

services rendered after Sept. 30, 1981, see section 741(e) of Pub.

L. 97-34, set out as a note under section 3201 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by section 1903(a)(9) of Pub. L. 94-455 applicable with

respect to compensation paid for services rendered after Dec. 31,

1976, see section 1903(d) of Pub. L. 94-455, set out as a note

under section 3101 of this title.

EFFECTIVE DATE OF 1975 AMENDMENT

Amendment by Pub. L. 94-93 applicable for taxable years ending on

or after Aug. 9, 1975, and for taxable years ending before Aug. 9,

1975, as to which the period for assessment and collection of tax

or the filing of a claim for credit or refund has not expired on

Aug. 9, 1975, see section 207 of Pub. L. 94-93, set out as a note

under section 3201 of this title.

EFFECTIVE DATE OF 1974 AMENDMENT

Section 604 of Pub. L. 93-445 provided that: "The amendments made

by the provisions of title V of this Act [amending this section and

section 6413 of this title] shall become effective on January 1,

1975, and shall apply only with respect to compensation paid for

services rendered on or after that date."

EFFECTIVE DATE OF 1973 AMENDMENT

Amendment by Pub. L. 93-69 effective Oct. 1, 1973, and applicable

only with respect to compensation paid for services rendered on or

after Oct. 1, 1973; and applicable to railway labor organization

covered by a private supplemental pension plan as of Oct. 1, 1973,

and subject to a moratorium, agreed to on or before Mar. 8, 1973,

for changes in pay rates, on the earlier of (1) date of expiration

of such moratorium, or (2) date as of which the railway labor

organization through collective bargaining agreement makes

amendment applicable, see section 109(b) of Pub. L. 93-69, set out

as a note under section 3201 of this title.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-699 effective with respect to man-hours,

beginning with first month following Oct. 30, 1966, for which

compensation is paid, see section 301(f) of Pub. L. 89-699, set out

as a note under section 3211 of this title.

EFFECTIVE DATE OF 1965 AMENDMENTS

Amendment by section 4 of Pub. L. 89-212 effective only with

respect to calendar months after the month in which Pub. L. 89-212

is enacted [September 1965], and amendment by section 5(c) of Pub.

L. 89-212 effective only with respect to compensation paid for

services rendered after Sept. 30, 1965, see section 6 of Pub. L.

89-212, set out as a note under section 3201 of this title.

Amendment by section 105(b)(3) of Pub. L. 89-97 effective with

respect to compensation paid for services rendered after Dec. 31,

1965, see section 105(b)(4) of Pub. L. 89-97, set out as a note

under section 3201 of this title.

Amendment by section 111(c)(3) 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 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 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.

EFFECTIVE DATE OF 1959 AMENDMENT

Amendment by Pub. L. 86-28 effective, except as otherwise

provided, first day of calendar month next following May 1959, see

section 202 of Pub. L. 86-28, set out as a note under section 3201

of this title.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 31, 1954, effective as if enacted as a part

of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], see

section 407 of act Aug. 31, 1954, as amended, set out as a note

under section 3201 of this title.

PENALTIES AND INTEREST NOT ASSESSED FOR FAILURE TO MAKE TIMELY

PAYMENT DURING PERIOD JANUARY 1, 1982, TO JUNE 30, 1982, OF TAXES

ATTRIBUTABLE TO AMENDMENTS BY PUB. L. 97-123

For provision that no penalties or interest shall be assessed on

account of any failure to make timely payment of taxes imposed by

subsec. (b) of this section with respect to payments made for the

period Jan. 1, 1982, and ending June 30, 1982, to the extent that

such taxes are attributable to section 3 of Pub. L. 97-123 or the

amendments made by that section, see section 3(f) of Pub. L.

97-123, set out as a note under section 3101 of this title.

EXCISE TAXES ON EMPLOYERS; EMPLOYEES COVERED BY CERTAIN

SUPPLEMENTAL PENSION PLANS

Section 5(b)(2) of Pub. L. 91-215 provided that: "The amendment

made by paragraph (1) [amending this section] shall apply to (A)

supplemental annuities paid on or after April 1, 1970, and (B)

man-hours with respect to which compensation is paid for services

rendered to such employer on or after such day."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 72, 3231, 3241, 6205,

6413 of this title; title 45 sections 231f-1, 231n-1; title 49

section 24104.

-End-

-CITE-

26 USC Subchapter D - General Provisions 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter D - General Provisions

-HEAD-

SUBCHAPTER D - GENERAL PROVISIONS

-MISC1-

Sec.

3231. Definitions.

3232. Court jurisdiction.

3233. Short title.

-End-

-CITE-

26 USC Sec. 3231 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter D - General Provisions

-HEAD-

Sec. 3231. Definitions

-STATUTE-

(a) Employer

For purposes of this chapter, the term "employer" means any

carrier (as defined in subsection (g)), and any company which is

directly or indirectly owned or controlled by one or more such

carriers or under common control therewith, and which operates any

equipment or facility or performs any service (except trucking

service, casual service, and the casual operation of equipment or

facilities) in connection with the transportation of passengers or

property by railroad, or the receipt, delivery, elevation, transfer

in transit, refrigeration or icing, storage, or handling of

property transported by railroad, and any receiver, trustee, or

other individual or body, judicial or otherwise, when in the

possession of the property or operating all or any part of the

business of any such employer; except that the term "employer"

shall not include any street, interurban, or suburban electric

railway, unless such railway is operating as a part of a general

steam-railroad system of transportation, but shall not exclude any

part of the general steam-railroad system of transportation now or

hereafter operated by any other motive power. The Surface

Transportation Board is hereby authorized and directed upon request

of the Secretary, or upon complaint of any party interested, to

determine after hearing whether any line operated by electric power

falls within the terms of this exception. The term "employer" shall

also include railroad associations, traffic associations, tariff

bureaus, demurrage bureaus, weighing and inspection bureaus,

collection agencies and other associations, bureaus, agencies, or

organizations controlled and maintained wholly or principally by

two or more employers as hereinbefore defined and engaged in the

performance of services in connection with or incidental to

railroad transportation; and railway labor organizations, national

in scope, which have been or may be organized in accordance with

the provisions of the Railway Labor Act, as amended (45 U.S.C.,

chapter 8), and their State and National legislative committees and

their general committees and their insurance departments and their

local lodges and divisions, established pursuant to the

constitutions and bylaws of such organizations. The term "employer"

shall not include any company by reason of its being engaged in the

mining of coal, the supplying of coal to an employer where delivery

is not beyond the mine tipple, and the operation of equipment or

facilities therefor, or in any of such activities.

(b) Employee

For purposes of this chapter, the term "employee" means any

individual in the service of one or more employers for

compensation; except that the term "employee" shall include an

employee of a local lodge or division defined as an employer in

subsection (a) only if he was in the service of or in the

employment relation to a carrier on or after August 29, 1935. An

individual shall be deemed to have been in the employment relation

to a carrier on August 29, 1935, if -

(1) he was on that date on leave of absence from his

employment, expressly granted to him by the carrier by whom he

was employed, or by a duly authorized representative of such

carrier, and the grant of such leave of absence was established

to the satisfaction of the Railroad Retirement Board before July

1947; or

(2) he was in the service of a carrier after August 29, 1935,

and before January 1946 in each of 6 calendar months, whether or

not consecutive; or

(3) before August 29, 1935, he did not retire and was not

retired or discharged from the service of the last carrier by

whom he was employed or its corporate or operating successor, but

-

(A) solely by reason of his physical or mental disability he

ceased before August 29, 1935, to be in the service of such

carrier and thereafter remained continuously disabled until he

attained age 65 or until August 1945, or

(B) solely for such last stated reason a carrier by whom he

was employed before August 29, 1935, or a carrier who is its

successor did not on or after August 29, 1935, and before

August 1945 call him to return to service, or

(C) if he was so called he was solely for such reason unable

to render service in 6 calendar months as provided in paragraph

(2); or

(4) he was on August 29, 1935, absent from the service of a

carrier by reason of a discharge which, within 1 year after the

effective date thereof, was protested, to an appropriate labor

representative or to the carrier, as wrongful, and which was

followed within 10 years of the effective date thereof by his

reinstatement in good faith to his former service with all his

seniority rights;

except that an individual shall not be deemed to have been on

August 29, 1935, in the employment relation to a carrier if before

that date he was granted a pension or gratuity on the basis of

which a pension was awarded to him pursuant to section 6 of the

Railroad Retirement Act of 1937 (45 U.S.C. 228f), or if during the

last payroll period before August 29, 1935, in which he rendered

service to a carrier he was not in the service of an employer, in

accordance with subsection (d), with respect to any service in such

payroll period, or if he could have been in the employment relation

to an employer only by reason of his having been, either before or

after August 29, 1935, in the service of a local lodge or division

defined as an employer in subsection (a). The term "employee"

includes an officer of an employer. The term "employee" shall not

include any individual while such individual is engaged in the

physical operations consisting of the mining of coal, the

preparation of coal, the handling (other than movement by rail with

standard railroad locomotives) of coal not beyond the mine tipple,

or the loading of coal at the tipple.

(c) Employee representative

For purposes of this chapter, the term "employee representative"

means any officer or official representative of a railway labor

organization other than a labor organization included in the term

"employer" as defined in subsection (a), who before or after June

29, 1937, was in the service of an employer as defined in

subsection (a) and who is duly authorized and designated to

represent employees in accordance with the Railway Labor Act (45

U.S.C., chapter 8), as amended, and any individual who is regularly

assigned to or regularly employed by such officer or official

representative in connection with the duties of his office.

(d) Service

For purposes of this chapter, an individual is in the service of

an employer whether his service is rendered within or without the

United States, if -

(1) he is subject to the continuing authority of the employer

to supervise and direct the manner of rendition of his service,

or he is rendering professional or technical services and is

integrated into the staff of the employer, or he is rendering, on

the property used in the employer's operations, other personal

services the rendition of which is integrated into the employer's

operations, and

(2) he renders such service for compensation;

except that an individual shall be deemed to be in the service of

an employer, other than a local lodge or division or a general

committee of a railway-labor-organization employer, not conducting

the principal part of its business in the United States, only when

he is rendering service to it in the United States; and an

individual shall be deemed to be in the service of such a local

lodge or division only if -

(3) all, or substantially all, the individuals constituting its

membership are employees of an employer conducting the principal

part of its business in the United States; or

(4) the headquarters of such local lodge or division is located

in the United States;

and an individual shall be deemed to be in the service of such a

general committee only if -

(5) he is representing a local lodge or division described in

paragraph (3) or (4) immediately above; or

(6) all, or substantially all, the individuals represented by

it are employees of an employer conducting the principal part of

its business in the United States; or

(7) he acts in the capacity of a general chairman or an

assistant general chairman of a general committee which

represents individuals rendering service in the United States to

an employer, but in such case if his office or headquarters is

not located in the United States and the individuals represented

by such general committee are employees of an employer not

conducting the principal part of its business in the United

States, only such proportion of the remuneration for such service

shall be regarded as compensation as the proportion which the

mileage in the United States under the jurisdiction of such

general committee bears to the total mileage under its

jurisdiction, unless such mileage formula is inapplicable, in

which case such other formula as the Railroad Retirement Board

may have prescribed pursuant to section 1(c) of the Railroad

Retirement Act of 1937 (45 U.S.C. 228a) shall be applicable, and

if the application of such mileage formula, or such other formula

as the Board may prescribe, would result in the compensation of

the individual being less than 10 percent of his remuneration for

such service, no part of such remuneration shall be regarded as

compensation;

Provided however, That an individual not a citizen or resident of

the United States shall not be deemed to be in the service of an

employer when rendering service outside the United States to an

employer who is required under the laws applicable in the place

where the service is rendered to employ therein, in whole or in

part, citizens or residents thereof; and the laws applicable on

August 29, 1935, in the place where the service is rendered shall

be deemed to have been applicable there at all times prior to that

date.

(e) Compensation

For purposes of this chapter -

(1) The term "compensation" means any form of money

remuneration paid to an individual for services rendered as an

employee to one or more employers. Such term does not include (i)

the amount of any payment (including any amount paid by an

employer for insurance or annuities, or into a fund, to provide

for any such payment) made to, or on behalf of, an employee or

any of his dependents under a plan or system established by an

employer which makes provision for his employees generally (or

for his employees generally and their dependents) or for a class

or classes of his employees (or for a class or classes of his

employees and their dependents), on account of sickness or

accident disability or medical or hospitalization expenses in

connection with sickness or accident disability or death, except

that this clause does not apply to a payment for group-term life

insurance to the extent that such payment is includible in the

gross income of the employee, (ii) tips (except as is provided

under paragraph (3)), (iii) an amount paid specifically - either

as an advance, as reimbursement or allowance - for traveling or

other bona fide and necessary expenses incurred or reasonably

expected to be incurred in the business of the employer provided

any such payment is identified by the employer either by a

separate payment or by specifically indicating the separate

amounts where both wages and expense reimbursement or allowance

are combined in a single payment, or (iv) any remuneration which

would not (if chapter 21 applied to such remuneration) be treated

as wages (as defined in section 3121(a)) by reason of section

3121(a)(5). Such term does not include remuneration for service

which is performed by a nonresident alien individual for the

period he is temporarily present in the United States as a

nonimmigrant under subparagraph (F), (J), (M), or (Q) of section

101(a)(15) of the Immigration and Nationality Act, as amended,

and which is performed to carry out the purpose specified in

subparagraph (F), (J), (M), or (Q), as the case may be. For the

purpose of determining the amount of taxes under sections 3201

and 3221, compensation earned in the service of a local lodge or

division of a railway-labor-organization employer shall be

disregarded with respect to any calendar month if the amount

thereof is less than $25. Compensation for service as a delegate

to a national or international convention of a railway labor

organization defined as an "employer" in subsection (a) of this

section shall be disregarded for purposes of determining the

amount of taxes due pursuant to this chapter if the individual

rendering such service has not previously rendered service, other

than as such a delegate, which may be included in his "years of

service" for purposes of the Railroad Retirement Act. Nothing in

the regulations prescribed for purposes of chapter 24 (relating

to wage withholding) which provides an exclusion from "wages" as

used in such chapter shall be construed to require a similar

exclusion from "compensation" in regulations prescribed for

purposes of this chapter.

(2) Application of contribution bases

(A) Compensation in excess of applicable base excluded

(i) In general

The term "compensation" does not include that part of

remuneration paid during any calendar year to an individual

by an employer after remuneration equal to the applicable

base has been paid during such calendar year to such

individual by such employer for services rendered as an

employee to such employer.

(ii) Remuneration not treated as compensation excluded

There shall not be taken into account under clause (i)

remuneration which (without regard to clause (i)) is not

treated as compensation under this subsection.

(iii) Hospital insurance taxes

Clause (i) shall not apply to -

(I) so much of the rate applicable under section 3201(a)

or 3221(a) as does not exceed the rate of tax in effect

under section 3101(b), and

(II) so much of the rate applicable under section 3211(a)

as does not exceed the rate of tax in effect under section

1401(b).

(B) Applicable base

(i) Tier 1 taxes

Except as provided in clause (ii), the term "applicable

base" means for any calendar year the contribution and

benefit base determined under section 230 of the Social

Security Act for such calendar year.

(ii) Tier 2 taxes, etc.

For purposes of -

(I) the taxes imposed by sections 3201(b), 3211(b), and

3221(b), and

(II) computing average monthly compensation under section

3(j) of the Railroad Retirement Act of 1974 (except with

respect to annuity amounts determined under subsection (a)

or (f)(3) of section 3 of such Act),

clause (2) of the first sentence, and the second sentence, of

subsection (c) of section 230 of the Social Security Act

shall be disregarded.

(C) Successor employers

For purposes of this paragraph, the second sentence of

section 3121(a)(1) (relating to successor employers) shall

apply, except that -

(i) the term "services" shall be substituted for

"employment" each place it appears,

(ii) the term "compensation" shall be substituted for

"remuneration (other than remuneration referred to in the

succeeding paragraphs of this subsection)" each place it

appears, and

(iii) the terms "employer", "services", and "compensation"

shall have the meanings given such terms by this section.

(3) Solely for purposes of the taxes imposed by section 3201

and other provisions of this chapter insofar as they relate to

such taxes, the term "compensation" also includes cash tips

received by an employee in any calendar month in the course of

his employment by an employer unless the amount of such cash tips

is less than $20.

(4)(A) For purposes of applying sections 3201(a), 3211(a), and

3221(a), in the case of payments made to an employee or any of

his dependents on account of sickness or accident disability,

clause (i) of the second sentence of paragraph (1) shall exclude

from the term "compensation" only -

(i) payments which are received under a workmen's

compensation law, and

(ii) benefits received under the Railroad Retirement Act of

1974.

(B) Notwithstanding any other provision of law, for purposes of

the sections specified in subparagraph (A), the term

"compensation" shall include benefits paid under section 2(a) of

the Railroad Unemployment Insurance Act for days of sickness,

except to the extent that such sickness (as determined in

accordance with standards prescribed by the Railroad Retirement

Board) is the result of on-the-job injury.

(C) Under regulations prescribed by the Secretary,

subparagraphs (A) and (B) shall not apply to payments made after

the expiration of a 6-month period comparable to the 6-month

period described in section 3121(a)(4).

(D) Except as otherwise provided in regulations prescribed by

the Secretary, any third party which makes a payment included in

compensation solely by reason of subparagraph (A) or (B) shall be

treated for purposes of this chapter as the employer with respect

to such compensation.

(5) The term "compensation" shall not include any benefit

provided to or on behalf of an employee if at the time such

benefit is provided it is reasonable to believe that the employee

will be able to exclude such benefit from income under section

74(c), 117, or 132.

(6) The term "compensation" shall not include any payment made,

or benefit furnished, to or for the benefit of an employee if at

the time of such payment or such furnishing it is reasonable to

believe that the employee will be able to exclude such payment or

benefit from income under section 127.

(7) The term "compensation" shall not include any contribution,

payment, or service provided by an employer which may be excluded

from the gross income of an employee, his spouse, or his

dependents, under the provisions of section 120 (relating to

amounts received under qualified group legal services plans).

(8) Treatment of certain deferred compensation and salary

reduction arrangements

(A) Certain employer contributions treated as compensation

Nothing in any paragraph of this subsection (other than

paragraph (2)) shall exclude from the term "compensation" any

amount described in subparagraph (A) or (B) of section

3121(v)(1).

(B) Treatment of certain nonqualified deferred compensation

The rules of section 3121(v)(2) which apply for purposes of

chapter 21 shall also apply for purposes of this chapter.

(9) Meals and lodging

The term "compensation" shall not include the value of meals or

lodging furnished by or on behalf of the employer if at the time

of such furnishing it is reasonable to believe that the employee

will be able to exclude such items from income under section 119.

(10) Archer MSA contributions

The term "compensation" shall not include any payment made to

or for the benefit of an employee if at the time of such payment

it is reasonable to believe that the employee will be able to

exclude such payment from income under section 106(b).

(f) Company

For purposes of this chapter, the term "company" includes

corporations, associations, and joint-stock companies.

(g) Carrier

For purposes of this chapter, the term "carrier" means a rail

carrier subject to part A of subtitle IV of title 49.

(h) Tips constituting compensation, time deemed paid

For purposes of this chapter, tips which constitute compensation

for purposes of the taxes imposed by section 3201 shall be deemed

to be paid at the time a written statement including such tips is

furnished to the employer pursuant to section 6053(a) or (if no

statement including such tips is so furnished) at the time

received.

(i) Concurrent employment by 2 or more employers

For purposes of this chapter, if 2 or more related corporations

which are employers concurrently employ the same individual and

compensate such individual through a common paymaster which is 1 of

such corporations, each such corporation shall be considered to

have paid as remuneration to such individual only the amounts

actually disbursed by it to such individual and shall not be

considered to have paid as remuneration to such individual amounts

actually disbursed to such individual by another of such

corporations.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 434; Aug. 31, 1954, ch. 1164,

pt. II, Sec. 206(b), 68 Stat. 1040; Pub. L. 89-212, Sec. 2(b),

Sept. 29, 1965, 79 Stat. 859; Pub. L. 90-624, Sec. 1, Oct. 22,

1968, 82 Stat. 1316; Pub. L. 94-92, title II, Sec. 203(b), Aug. 9,

1975, 89 Stat. 465; Pub. L. 94-93, title II, Secs. 204-206, Aug. 9,

1975, 89 Stat. 466; Pub. L. 94-455, title XIX, Secs. 1903(a)(10),

1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1808, 1834; Pub. L. 94-547,

Sec. 4(b), Oct. 18, 1976, 90 Stat. 2526; Pub. L. 95-473, Sec.

2(a)(2)(G), Oct. 17, 1978, 92 Stat. 1465; Pub. L. 97-34, title VII,

Secs. 741(d)(2), 743(a)-(c), Aug. 13, 1981, 95 Stat. 347, 348; Pub.

L. 97-123, Sec. 3(c), Dec. 29, 1981, 95 Stat. 1662; Pub. L. 98-76,

title II, Sec. 225(a)(1), (3), (b), (c)(1)(C), (6)-(8), Aug. 12,

1983, 97 Stat. 424, 425; Pub. L. 98-369, div. A, title V, Sec.

531(d)(2), July 18, 1984, 98 Stat. 884; Pub. L. 98-611, Sec. 1(f),

Oct. 31, 1984, 98 Stat. 3178; Pub. L. 98-612, Sec. 1(c), Oct. 31,

1984, 98 Stat. 3181; Pub. L. 99-514, title I, Sec. 122(e)(2), title

XVIII, Sec. 1899A(41), Oct. 22, 1986, 100 Stat. 2112, 2960; Pub. L.

100-647, title I, Secs. 1001(d)(2)(C)(ii), 1011B(a)(22)(B), Nov.

10, 1988, 102 Stat. 3351, 3486; Pub. L. 101-140, title II, Sec.

203(a)(2), Nov. 8, 1989, 103 Stat. 830; Pub. L. 101-239, title X,

Secs. 10205(a), 10206(a), (b), 10207(a), (b), Dec. 19, 1989, 103

Stat. 2474-2476; Pub. L. 101-508, title XI, Secs. 11331(c),

11704(a)(19), Nov. 5, 1990, 104 Stat. 1388-468, 1388-519; Pub. L.

103-66, title XIII, Sec. 13207(c), Aug. 10, 1993, 107 Stat. 468;

Pub. L. 103-296, title III, Sec. 320(a)(1)(D), Aug. 15, 1994, 108

Stat. 1535; Pub. L. 104-88, title III, Sec. 304(d), Dec. 29, 1995,

109 Stat. 944; Pub. L. 104-191, title III, Sec. 301(c)(2)(A), Aug.

21, 1996, 110 Stat. 2049; Pub. L. 106-554, Sec. 1(a)(7) [title II,

Sec. 202(b)(5)], Dec. 21, 2000, 114 Stat. 2763, 2763A-629; Pub. L.

107-90, title II, Sec. 204(e)(3), (4), Dec. 21, 2001, 115 Stat.

893.)

-REFTEXT-

REFERENCES IN TEXT

The Railway Labor Act, referred to in subsecs. (a) and (c), is

act May 20, 1926, ch. 347, 44 Stat. 577, as amended, which is

classified principally to chapter 8 (Sec. 151 et seq.) of Title 45,

Railroads. For complete classification of this Act to the Code, see

section 151 of Title 45 and Tables.

Sections 1 and 6 of the Railroad Retirement Act of 1937, referred

to in subsecs. (b) and (d)(7), were classified to sections 228a and

228f of Title 45. The subject matter of sections 228a and 228f is

covered by sections 231 and 231o of Title 45.

Section 230 of the Social Security Act, referred to in subsec.

(e)(2)(B), is classified to section 430 of Title 42, The Public

Health and Welfare.

Section 3(a), (f)(3), (j) of the Railroad Retirement Act of 1974,

referred to in subsec. (e)(2)(B)(ii)(II), is classified to section

231b(a), (f)(3), (j) of Title 45, Railroads.

The Railroad Retirement Act of 1974, referred to in subsec.

(e)(4)(A)(ii), is act Aug. 29, 1935, ch. 812, as amended generally

by Pub. L. 93-445, title I, Sec. 101, Oct. 16, 1974, 88 Stat. 1305,

which is classified generally to subchapter IV (Sec. 231 et seq.)

of chapter 9 of Title 45. For further details and complete

classification of this Act to the Code, see Codification note set

out preceding section 231 of Title 45, section 231t of Title 45,

and Tables.

Section 101(a)(15) of the Immigration and Nationality Act,

referred to in subsec. (e)(1), is classified to section 1101(a)(15)

of Title 8, Aliens and Nationality.

Section 2(a) of the Railroad Unemployment Insurance Act, referred

to in subsec. (e)(4)(B), is classified to section 352(a) of Title

45, Railroads.

-MISC1-

AMENDMENTS

2001 - Subsec. (e)(2)(A)(iii)(II). Pub. L. 107-90, Sec.

204(e)(3), substituted "3211(a)" for "3211(a)(1)".

Subsec. (e)(2)(B)(ii)(I). Pub. L. 107-90, Sec. 204(e)(4),

substituted "3211(b)" for "3211(a)(2)".

Subsec. (e)(4)(A). Pub. L. 107-90, Sec. 204(e)(3), substituted

"3211(a)" for "3211(a)(1)".

2000 - Subsec. (e)(10). Pub. L. 106-554 substituted "Archer MSA"

for "Medical savings account" in heading.

1996 - Subsec. (e)(10). Pub. L. 104-191 added par. (10).

1995 - Subsec. (a). Pub. L. 104-88, Sec. 304(d)(1), substituted

"Surface Transportation Board" for "Interstate Commerce

Commission".

Subsec. (g). Pub. L. 104-88, Sec. 304(d)(2), substituted "a rail

carrier subject to part A of subtitle IV" for "an express carrier,

sleeping car carrier, or rail carrier providing transportation

subject to subchapter I of chapter 105".

1994 - Subsec. (e)(1). Pub. L. 103-296 substituted "(J), (M), or

(Q)" for "(J), or (M)" in two places.

1993 - Subsec. (e)(2)(A)(iii). Pub. L. 103-66, Sec. 13207(c)(1),

added cl. (iii).

Subsec. (e)(2)(B)(i). Pub. L. 103-66, Sec. 13207(c)(2), amended

heading and text of cl. (i) generally. Prior to amendment, text

read as follows:

"(I) In general. - Except as provided in subclause (II) of this

clause and in clause (ii), the term 'applicable base' means for any

calendar year the contribution and benefit base determined under

section 230 of the Social Security Act for such calendar year.

"(II) Hospital insurance taxes. - For purposes of applying so

much of the rate applicable under section 3201(a) or 3221(a) (as

the case may be) as does not exceed the rate of tax in effect under

section 3101(b), and for purposes of applying so much of the rate

of tax applicable under section 3211(a)(1) as does not exceed the

rate of tax in effect under section 1401(b), the term 'applicable

base' means for any calendar year the applicable contribution base

determined under section 3121(x)(2) for such calendar year."

1990 - Subsec. (e)(2)(B)(i). Pub. L. 101-508, Sec. 11331(c),

amended cl. (i) generally. Prior to amendment, cl. (i) read as

follows: "Except as provided in clause (ii), the term 'applicable

base' means for any calendar year the contribution and benefit base

determined under section 230 of the Social Security Act for such

calendar year."

Subsec. (e)(8) to (10). Pub. L. 101-508, Sec. 11704(a)(19),

redesignated pars. (9) and (10) as (8) and (9), respectively.

1989 - Subsec. (e)(1). Pub. L. 101-239, Sec. 10207(b), inserted

at end "Nothing in the regulations prescribed for purposes of

chapter 24 (relating to wage withholding) which provides an

exclusion from 'wages' as used in such chapter shall be construed

to require a similar exclusion from 'compensation' in regulations

prescribed for purposes of this chapter."

Pub. L. 101-239, Sec. 10206(a), substituted "(iii)" for "or

(iii)" and inserted ", or (iv) any remuneration which would not (if

chapter 21 applied to such remuneration) be treated as wages (as

defined in section 3121(a)) by reason of section 3121(a)(5)".

Pub. L. 101-239, Sec. 10205(a), inserted "or death, except that

this clause does not apply to a payment for group-term life

insurance to the extent that such payment is includible in the

gross income of the employee" before ", (ii) tips".

Subsec. (e)(8). Pub. L. 101-140 amended subsec. (e) to read as if

amendments by Pub. L. 100-647, Sec. 1011B(a)(22)(B), had not been

enacted, see 1988 Amendment note below.

Subsec. (e)(9). Pub. L. 101-239, Sec. 10206(b), added par. (9).

Subsec. (e)(10). Pub. L. 101-239, Sec. 10207(a), added par. (10).

1988 - Subsec. (e)(1). Pub. L. 100-647, Sec. 1001(d)(2)(C)(ii),

substituted "(F), (J), or (M)" for "(F) or (J)" in two places.

Subsec. (e)(8). Pub. L. 100-647, Sec. 1011B(a)(22)(B), added par.

(8).

1986 - Subsec. (e)(5). Pub. L. 99-514, Sec. 122(e)(2), inserted

reference to section 74(c).

Subsec. (e)(6), (7). Pub. L. 99-514, Sec. 1899A(41), redesignated

par. (6), relating to amounts excludable under section 120, as (7).

1984 - Subsec. (e)(5). Pub. L. 98-369, Sec. 531(d)(2), added par.

(5).

Subsec. (e)(6). Pub. L. 98-611 added par. (6) relating to amounts

excludable under section 127.

Pub. L. 98-612 added par. (6) relating to amounts excludable

under section 120.

1983 - Subsec. (e)(1). Pub. L. 98-76, Sec. 225(a)(3), struck out

provisions that compensation which was paid in one calendar month

but which would be payable in a prior or subsequent taxable month

but for the fact prescribed date of payment would fall on a

Saturday, Sunday or legal holiday would be deemed to have been paid

in such prior or subsequent taxable month and that compensation

which was earned during the period for which the Secretary would

require a return of taxes under this chapter to be made and which

was payable during the calendar month following such period would

be deemed to have been paid during such period only.

Subsec. (e)(2). Pub. L. 98-76, Sec. 225(a)(1), amended par. (2)

generally, substituting provisions which exclude compensation in

excess of applicable base, which define "applicable base", and

which provide for the applicability of successor employer

provisions to this paragraph, for provisions that a payment made by

an employer to an individual through the employer's payroll would

be presumed, in the absence of evidence to the contrary, to be

compensation for service rendered by such individual as an employee

of the employer in the period with respect to which the payment was

made, that an employee receiving retroactive wage payments would be

deemed to be paid compensation in the period during which such

compensation was earned only upon a written request by such

employee, made within six months following the payment, and a

showing that such compensation was earned during a period other

than the period in which it was paid, that an employee would be

deemed to be paid "for time lost" the amount he was paid by an

employer with respect to an identifiable period of absence from the

active service of the employer, including absence on account of

personal injury, and the amount he was paid by the employer for

loss of earnings resulting from his displacement to a less

remunerative position or occupation, and that if a payment was made

by an employer with respect to a personal injury and included pay

for time lost, the total payment would be deemed to be paid for

time lost unless, at the time of payment, a part of such payment

was specifically apportioned to factors other than time lost, in

which event only such part of the payment as was not so apportioned

would be deemed to be paid for time lost.

Subsec. (e)(3). Pub. L. 98-76, Sec. 225(c)(1)(C), (6),

substituted "taxes imposed by section 3201" for "tax imposed by

section 3201", and "such taxes" for "such tax".

Subsec. (e)(4)(A). Pub. L. 98-76, Sec. 225(c)(7), substituted

"3201(a), 3211(a)(1), and 3221(a)" for "3201(b) and 3221(b) (and so

much of section 3211(a) as relates to the rates of the taxes

imposed by sections 3101 and 3111)".

Subsec. (h). Pub. L. 98-76, Sec. 225(c)(8), substituted "taxes

imposed by section 3201" for "tax imposed under section 3201", and

struck out "; and tips so deemed to be paid in any month shall be

deemed paid for services rendered in such month" after "time

received".

Subsec. (i). Pub. L. 98-76, Sec. 225(b), added subsec. (i).

1981 - Subsec. (e)(1). Pub. L. 97-34, Sec. 743(a), inserted after

third sentence provision that "Compensation which is paid in one

calendar month but which would be payable in a prior or subsequent

taxable month but for the fact that prescribed date of payment

would fall on a Saturday, Sunday or legal holiday shall be deemed

to have been paid in such prior or subsequent taxable month."

Pub. L. 97-34, Sec. 741(d)(2), struck out cl. (iii) exclusion

from term "compensation" the voluntary payment by an employer,

without deduction from the remuneration of the employee, of the tax

imposed on such employee by section 3201, redesignated as cl. (iii)

provisions formerly designated (iv).

Subsec. (e)(2). Pub. L. 97-34, Sec. 743(b), (c), inserted first

sentence respecting presumption of a payment through the employer's

payroll as being compensation for services rendered as an employee

in the period with respect to which payment is made, and in second

sentence following "an employee" inserted "receiving retroactive

wage payments".

Subsec. (e)(4). Pub. L. 97-123 added par. (4).

1978 - Subsec. (g). Pub. L. 95-473 substituted "express carrier,

sleeping car carrier, or rail carrier providing transportation

subject to subchapter I of chapter 105 of title 49" for "express

company, sleeping-car company, or carrier by railroad, subject to

part I of the Interstate Commerce Act (49 U.S.C., chapter 1)".

1976 - Subsec. (a). Pub. L. 94-455, Secs. 1903(a)(10)(A),

1906(b)(13)(A), struck out "44 Stat. 577;" before "45 U.S.C.,

chapter 8" and "or his delegate" after "Secretary", respectively.

Subsec. (b). Pub. L. 94-455, Sec. 1903(a)(10)(B), struck out in

provisions following par. (4) "50 Stat. 312;" before "45 U.S.C.

228f".

Subsec. (c). Pub. L. 94-455, Sec. 1903(a)(10)(C), struck out "44

Stat. 577;" before "45 U.S.C. chapter 8".

Subsec. (d)(7). Pub. L. 94-455, Sec. 1903(a)(10)(D), struck out

"50 Stat. 308;" before "45 U.S.C. 228a".

Subsec. (e)(1). Pub. L. 94-547 provided that "compensation" not

include amount of any payment (including any amount paid by an

employer for insurance or annuities, or into a fund, to provide for

any such payment) made to, or on behalf of, an employee or any of

his dependents under a plan or system established by an employer

which makes provision for his employees generally (or for his

employees generally and their dependents) or for a class or classes

of his employees (or for a class or classes of his employees and

their dependents), on account of sickness or accident disability or

medical or hospitalization expenses in connection with sickness or

accident disability, or an amount paid specifically - either as an

advance, as reimbursement or allowance - for traveling or other

bona fide and necessary expenses incurred or reasonably expected to

be incurred in the business of the employer provided any such

payment is identified by the employer either by a separate payment

or by specifically indicating the separate amounts where both wages

and expense reimbursement or allowance are combined in a single

payment.

Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out "or his delegate"

after "Secretary".

1975 - Subsec. (e)(1). Pub. L. 94-93, Sec. 204, substituted "paid

to an individual for services rendered as an employee to one or

more employers" for "earned by an individual for services rendered

as an employee to one or more employers, or as an employee

representative, including remuneration paid for time lost as an

employee, but remuneration paid for time lost shall be deemed

earned in the month in which such time is lost".

Pub. L. 94-92 increased from $3 to $25 amount of compensation

earned in the service of a local lodge or division of a

railway-labor-organization employer to be disregarded with respect

to any calendar month in the determination of amount of taxes under

sections 3201 and 3221.

Subsec. (e)(2). Pub. L. 94-93, Secs. 205, 206, substituted

provision that an employee shall be deemed to be paid compensation

in the period during which such compensation is earned only upon a

written request by such employee, made within six months following

the payment, and a showing that such compensation was earned during

a period other than the period in which it was paid for provision

that a payment made by an employer to an individual through the

employer's payroll shall be presumed, in the absence of evidence to

the contrary, to be compensation for service rendered by such

individual as an employee of the employer in the period with

respect to which payment is made.

1968 - Subsec. (e)(1). Pub. L. 90-624 inserted provision

excluding remuneration for service performed by nonresident alien

individuals temporarily in the United States as participants in a

cultural exchange or training program.

1965 - Subsec. (e)(1). Pub. L. 89-212, Sec. 2(b)(1), inserted

"(except as is provided under paragraph (3))".

Subsec. (e)(3). Pub. L. 89-212, Sec. 2(b)(2), added par. (3).

Subsec. (h). Pub. L. 89-212, Sec. 2(b)(3), added subsec. (h).

1954 - Subsec. (e)(1). Act Aug. 31, 1954, excluded from taxation

compensation, for service as a delegate to a national or

international convention of a railway labor organization, of any

person who has no other previous creditable service.

EFFECTIVE DATE OF 2001 AMENDMENT

Amendment by Pub. L. 107-90 applicable to calendar years

beginning after Dec. 31, 2001, see section 204(f) of Pub. L.

107-90, set out as an Effective and Termination Dates of 2001

Amendments note under section 24 of this title.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-191 applicable to taxable years

beginning after Dec. 31, 1996, see section 301(j) of Pub. L.

104-191, set out as a note under section 62 of this title.

EFFECTIVE DATE OF 1995 AMENDMENT

Amendment by Pub. L. 104-88 effective Jan. 1, 1996, see section 2

of Pub. L. 104-88, set out as an Effective Date note under section

701 of Title 49, Transportation.

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-296 effective with calendar quarter

following Aug. 15, 1994, see section 320(c) of Pub. L. 103-296, set

out as a note under section 871 of this title.

EFFECTIVE DATE OF 1993 AMENDMENT

Amendment by Pub. L. 103-66 applicable to 1994 and later calendar

years, see section 13207(e) of Pub. L. 103-66, set out as a note

under section 1402 of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 11331(c) of Pub. L. 101-508 applicable to

1991 and later calendar years, see section 11331(e) of Pub. L.

101-508, set out as a note under section 1402 of this title.

EFFECTIVE DATE OF 1989 AMENDMENTS

Section 10205(b) of Pub. L. 101-239 provided that:

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

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

apply to -

"(A) group-term life insurance coverage in effect after

December 31, 1989, and

"(B) remuneration paid before January 1, 1990, which the

employer treated as compensation when paid.

"(2) Exception. - The amendment made by subsection (a) shall not

apply with respect to payments by the employer (or a successor of

such employer) for group-term life insurance for such employer's

former employees who separated from employment with the employer on

or before December 31, 1989, to the extent that such payments are

not for coverage for any such employee for any period for which

such employee is employed by such employer (or a successor of such

employer) after the date of such separation.

"(3) Benefit determinations to take into account remuneration on

which tax paid. - The term 'compensation' as defined in section

1(h) of the Railroad Retirement Act of 1974 [45 U.S.C. 231(h)]

includes any remuneration which is included in the term

'compensation' as defined in section 3231(e)(1) of the Internal

Revenue Code of 1986 by reason of the amendment made by subsection

(a)."

Section 10206(c) of Pub. L. 101-239 provided that:

"(1) Subsection (a). - The amendment made by subsection (a)

[amending this section] shall apply to remuneration paid after

December 31, 1989.

"(2) Subsection (b). - Except as otherwise provided in this

subsection -

"(A) In general. - The amendment made by subsection (b)

[amending this section] shall apply to -

"(i) remuneration paid after December 31, 1989, and

"(ii) remuneration paid before January 1, 1990, which the

employer treated as compensation when paid.

"(B) Benefit determinations to take into account remuneration

on which tax paid. - The term 'compensation' as defined in

section 1(h) of the Railroad Retirement Act of 1974 [45 U.S.C.

231(h)] includes any remuneration which is included in the term

'compensation' as defined in section 3231(e)(1) of the Internal

Revenue Code of 1986 by reason of the amendment made by

subsection (b).

"(3) Special rule for certain payments. - For purposes of

applying the amendment made by subsection (b) to remuneration paid

after December 31, 1989, which would have been taken into account

before January 1, 1990, if such amendments had applied to periods

before January 1, 1990, such remuneration shall be taken into

account when paid (or, at the election of the payor, at the time

which would be appropriate if such amendments had applied).

"(4) Exception for certain 401(k) contributions. - The amendment

made by subsection (b) shall not apply to employer contributions

made during 1990 and attributable to services performed during 1989

under a qualified cash or deferred arrangement (as defined in

section 401(k) of the Internal Revenue Code of 1986) if, under the

terms of the arrangement as in effect on June 15, 1989 -

"(A) the employee makes an election with respect to such

contributions before January 1, 1990, and

"(B) the employer identifies the amount of such contribution

before January 1, 1990.

"(5) Special rule with respect to nonqualified deferred

compensation plans. - In the case of an agreement in existence on

June 15, 1989, between a nonqualified deferred compensation plan

(as defined in section 3121(v)(2)(C) of such Code) and an

individual, the amendment made by subsection (b) shall apply with

respect to services performed by the individual after December 31,

1989. The preceding sentence shall not apply in the case of a plan

to which section 457(a) of such Code applies."

Section 10207(c) of Pub. L. 101-239 provided that: "The

amendments made by this section [amending this section] shall apply

to remuneration paid after December 31, 1989."

Amendment by Pub. L. 101-140 effective as if included in section

1151 of Pub. L. 99-514, see section 203(c) of Pub. L. 101-140, set

out as a note under section 79 of this title.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by section 1001(d)(2)(C)(ii) of Pub. L. 100-647

effective, except as otherwise provided, as if included in the

provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which

such amendment relates, see section 1019(a) of Pub. L. 100-647, set

out as a note under section 1 of this title.

Amendment by section 1011B(a)(22)(B) of Pub. L. 100-647 not

applicable to any individual who separated from service with the

employer before Jan. 1, 1989, see section 1011B(a)(22)(F) of Pub.

L. 100-647, set out as a note under section 3121 of this title.

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by section 122(e)(2) of Pub. L. 99-514 applicable to

prizes and awards granted after Dec. 31, 1986, see section 151(c)

of Pub. L. 99-514, set out as a note under section 1 of this title.

EFFECTIVE DATE OF 1984 AMENDMENTS

Section 1(d)(3) of Pub. L. 98-612 provided that: "The amendment

made by subsection (c) [amending this section] shall apply to

remuneration paid after December 31, 1984."

Amendment by Pub. L. 98-611 applicable to remuneration paid after

Dec. 31, 1984, see section 1(g)(3) of Pub. L. 98-611, set out as a

note under section 127 of this title.

Amendment by Pub. L. 98-369 effective Jan. 1, 1985, see section

531(h) of Pub. L. 98-369, set out as an Effective Date note under

section 132 of this title.

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 98-76 applicable to remuneration paid after

Dec. 31, 1984, see section 227(a) of Pub. L. 98-76, set out as a

note under section 3201 of this title.

EFFECTIVE DATE OF 1981 AMENDMENTS

Amendment by Pub. L. 97-123 applicable to remuneration paid after

Dec. 31, 1981, except as otherwise provided, see section 3(g) of

Pub. L. 97-123, set out as a note under section 3121 of this title.

Amendment by section 741(d)(2) of Pub. L. 97-34 applicable to

compensation paid for services rendered after Sept. 30, 1981, see

section 741(e) of Pub. L. 97-34, set out as a note under section

3201 of this title.

Section 743(d) of Pub. L. 97-34 provided that: "The amendments

made by this section [amending this section] shall apply for

taxable years beginning after December 31, 1981."

EFFECTIVE DATE OF 1976 AMENDMENT

Section 4(c)(2) of Pub. L. 94-547 provided that: "The amendments

made by subsection (b) of this section [amending this section]

shall apply with respect to taxable years ending after December 31,

1953: Provided, however, That any taxes paid under the Railroad

Retirement Tax Act [this chapter] prior to the date on which this

Act is enacted [Oct. 18, 1976] shall not be affected or adjusted by

reason of the amendments made by such subsection (b) except to the

extent that the applicable period of limitation for the assessment

of tax and the filing of a claim for credit or refund has not

expired prior to the date on which this Act is enacted. If the

applicable period of limitation for the filing of a claim for

credit or refund would expire within the six-month period following

the date on which this Act is enacted, the applicable period for

the filing of such a claim for credit or refund shall be extended

to include such six-month period."

EFFECTIVE DATE OF 1975 AMENDMENTS

Amendment by sections 204 and 205 of Pub. L. 94-93 applicable for

taxable years ending on or after Aug. 9, 1975, and for taxable

years ending before Aug. 9, 1975, as to which the period for

assessment and collection of tax or the filing of a claim for

credit or refund has not expired on Aug. 9, 1975, and amendment by

section 206 of Pub. L. 94-93 applicable for taxable years beginning

on or after Aug. 9, 1975: Provided, however, That with respect to

payment made prior to Aug. 9, 1975, the employee may file a written

request under section 206 of Pub. L. 94-93 within six months after

Aug. 9, 1975, see section 207 of Pub. L. 94-93, set out as a note

under section 3201 of this title.

Amendment by Pub. L. 94-92 effective Jan. 1, 1975, and applicable

only with respect to compensation paid for services rendered on or

after Jan. 1, 1975, see section 203(c) of Pub. L. 94-92, set out as

a note under section 1402 of this title.

EFFECTIVE DATE OF 1968 AMENDMENT

Section 4(a) of Pub. L. 90-624, as amended by Pub. L. 99-514,

Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:

"(1) The amendments made by the first two sections of this Act

[amending this section and section 228a of Title 45, Railroads]

shall apply with respect to service performed after December 31,

1961.

"(2) Notwithstanding the expiration before the date of the

enactment of this Act [Oct. 22, 1968] or within 6 months after such

date of the period for filing claim for credit or refund, claim for

credit or refund of any overpayment of any tax imposed by chapter

22 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954, 26

U.S.C. 3201 et seq.] attributable to the amendment made by the

first section of this Act [amending this section] may be filed at

any time within one year after such date of enactment.

"(3) Any credit or refund of an overpayment of the tax imposed by

section 3201 or 3211 of the Internal Revenue Code of 1986 which is

attributable to the amendment made by the first section of this Act

shall be appropriately adjusted for any lump-sum payment which has

been made under section 5(f)(2) of the Railroad Retirement Act of

1937 [section 228e(f)(2) of Title 45] before the date of the

allowance of such credit or the making of such refund."

EFFECTIVE DATE OF 1965 AMENDMENT

Amendment by Pub. L. 89-212 effective only with respect to tips

received after 1965, see section 6 of Pub. L. 89-212, set out as a

note under section 3201 of this title.

EFFECTIVE DATE OF 1954 AMENDMENT

Amendment by act Aug. 31, 1954, effective as if enacted as a part

of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], see

section 407 of act Aug. 31, 1954, as amended, set out as a note

under section 3201 of this title.

REGULATIONS

For provisions requiring that the regulations prescribed under

subsec. (e)(4) of this section prescribe procedures under which, if

(with respect to any employee) the third party promptly (A)

withholds the employee portion of the taxes involved, (B) deposits

such portion under section 6302 of such Code, and (C) notifies the

employer of the amount of the wages or compensation involved, the

employer (and not the third party) shall be liable for the employer

portion of the taxes involved and for meeting the requirements of

section 6051 of this title (relating to receipts for employees)

with respect to the wages or compensation involved, see section

3(d) of Pub. L. 97-123, set out as a note under section 3121 of

this title.

EXCLUSION FROM WAGES AND COMPENSATION OF REFUNDS REQUIRED FROM

EMPLOYERS TO COMPENSATE FOR DUPLICATION OF MEDICARE BENEFITS BY

HEALTH CARE BENEFITS PROVIDED BY EMPLOYERS

For purposes of this chapter, the term "compensation" shall not

include the amount of any refund required under section 421 of Pub.

L. 100-360, 42 U.S.C. 1395b note, see section 10202 of Pub. L.

101-239, set out as a note under section 1395b of Title 42, The

Public Health and Welfare.

PAYMENTS UNDER STATE TEMPORARY DISABILITY LAW TO BE TREATED AS

REMUNERATION FOR SERVICE

For purposes of applying subsec. (e) of this section with respect

to subsec. (e)(4) of this section, payments under a State temporary

disability law to be treated as remuneration for service, see

section 3(e) of Pub. L. 97-123, set out as a note under section

3121 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1402, 3121, 3201, 3202,

3211, 3212, 3221, 6053, 6413, 6652 of this title; title 42 sections

410, 411; title 45 section 351.

-End-

-CITE-

26 USC Sec. 3232 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter D - General Provisions

-HEAD-

Sec. 3232. Court jurisdiction

-STATUTE-

The several district courts of the United States shall have

jurisdiction to entertain an application by the Attorney General on

behalf of the Secretary to compel an employee or other person

residing within the jurisdiction of the court or an employer

subject to service of process within its jurisdiction to comply

with any obligations imposed on such employee, employer, or other

person under the provisions of this chapter. The jurisdiction

herein specifically conferred upon such Federal courts shall not be

held exclusive of any jurisdiction otherwise possessed by such

courts to entertain civil actions, whether legal or equitable in

nature, in aid of the enforcement of rights or obligations arising

under the provisions of this chapter.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 437; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

-End-

-CITE-

26 USC Sec. 3233 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter D - General Provisions

-HEAD-

Sec. 3233. Short title

-STATUTE-

This chapter may be cited as the "Railroad Retirement Tax Act."

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 438.)

-End-

-CITE-

26 USC Subchapter E - Tier 2 Tax Rate Determination 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter E - Tier 2 Tax Rate Determination

-HEAD-

SUBCHAPTER E - TIER 2 TAX RATE DETERMINATION

-MISC1-

Sec.

3241. Determination of tier 2 tax rate based on average

account benefits ratio.

-End-

-CITE-

26 USC Sec. 3241 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle C - Employment Taxes

CHAPTER 22 - RAILROAD RETIREMENT TAX ACT

Subchapter E - Tier 2 Tax Rate Determination

-HEAD-

Sec. 3241. Determination of tier 2 tax rate based on average

account benefits ratio

-STATUTE-

(a) In general

For purposes of sections 3201(b), 3211(b), and 3221(b), the

applicable percentage for any calendar year is the percentage

determined in accordance with the table in subsection (b).

(b) Tax rate schedule

Average account benefits Applicable Applicable

ratio percentage percentage

for sections for section

3211(b) and 3201(b)

3221(b)

At least But less

than

--------------------------------------------------------------------

2.5 22.1 4.9

2.5 3.0 18.1 4.9

3.0 3.5 15.1 4.9

3.5 4.0 14.1 4.9

4.0 6.1 13.1 4.9

6.1 6.5 12.6 4.4

6.5 7.0 12.1 3.9

7.0 7.5 11.6 3.4

7.5 8.0 11.1 2.9

8.0 8.5 10.1 1.9

8.5 9.0 9.1 0.9

9.0 8.2 0

--------------------------------------------------------------------

(c) Definitions related to determination of rates of tax

(1) Average account benefits ratio

For purposes of this section, the term "average account

benefits ratio" means, with respect to any calendar year, the

average determined by the Secretary of the account benefits

ratios for the 10 most recent fiscal years ending before such

calendar year. If the amount determined under the preceding

sentence is not a multiple of 0.1, such amount shall be increased

to the next highest multiple of 0.1.

(2) Account benefits ratio

For purposes of this section, the term "account benefits ratio"

means, with respect to any fiscal year, the amount determined by

the Railroad Retirement Board by dividing the fair market value

of the assets in the Railroad Retirement Account and of the

National Railroad Retirement Investment Trust (and for years

before 2002, the Social Security Equivalent Benefits Account) as

of the close of such fiscal year by the total benefits and

administrative expenses paid from the Railroad Retirement Account

and the National Railroad Retirement Investment Trust during such

fiscal year.

(d) Notice

No later than December 1 of each calendar year, the Secretary

shall publish a notice in the Federal Register of the rates of tax

determined under this section which are applicable for the

following calendar year.

-SOURCE-

(Added Pub. L. 107-90, title II, Sec. 204(d), Dec. 21, 2001, 115

Stat. 892.)

-MISC1-

EFFECTIVE DATE

Subchapter applicable to calendar years beginning after Dec. 31,

2001, see section 204(f) of Pub. L. 107-90, set out as an Effective

and Termination Dates of 2001 Amendments note under section 24 of

this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3201, 3211, 3221 of this

title; title 45 sections 231u, 231v.

-End-