Publication 80 - Circular Ss - Department Of The Treasury (Page 18 of 24) in pdf

Treatment Under Employment Taxes

Special Classes of Employment

Social Security

Federal Unemployment

and Special Types of Payments

and Medicare

(U.S. Virgin Islands Only)

Fishing and related activities, employment in

connection with catching, harvesting,

farming, etc.:

1. Salmon or halibut.

Taxable unless 3 applies.

2. Other fish and other aquatic forms of animal

Taxable unless 3 applies.

Exempt unless on vessel of more than 10 net

and vegetable life.

tons and 3 does not apply.

3. An arrangement with the owner or operator of Exempt if any cash remuneration is:

the boat by which the individual receives a

share of the boat’s catch (or proceeds from the

(a) $100 or less,

sale of the catch), the share depending on the

(b) contingent on minimum catch, and

boat’s catch, and operating crew of the boat is

normally fewer than 10 individuals.*

remuneration is traditional).

Foreign governments and international

Exempt.

organizations.

Foreign service by U.S. citizens:

1. As U.S. Government employee.

Same as within U.S.

Exempt. See also Federal employees on page

17.

2. For foreign affiliates of American employers

Exempt unless (a) an American employer by

Exempt unless (a) on American vessel or aircraft

and other private employers.

agreement covers U.S. citizens employed by

and work is performed under contract made in

its foreign affiliates or (b) U.S. citizen works for

U.S. or worker is employed on vessel when it

American employer.

touches U.S. port, or (b) U.S. citizen works for

American employer (except in a contiguous

country with which the U.S. has an agreement

for unemployment compensation) or in the

U.S. Virgin Islands.

Fringe benefits.

Taxable on excess of fair market value of the benefit over the sum of an amount paid for it by the

employee and any amount excludable by law. However, optional special valuation rules may

apply.**

Government employees (other than Federal).

Taxable if services are covered by section 218

Exempt.

(Social Security Act) agreement; taxable in

certain other cases.

Group-term life insurance costs. See Pub.

Exempt, except for the cost of premiums that

Exempt.

15-B for details.

provide more than $50,000 coverage.

Homeworkers (industrial, cottage-industry):

1. Common law employees.

Taxable.

2. Statutory employees (see section 1).

Taxable if paid $100 or more in cash in a year.

Exempt.

Hospital interns.

Taxable.

Exempt.

Household workers (domestic service in private Taxable if paid $1,400 or more in cash in 2004.

Taxable if employee paid total cash wages of

homes; farmers, see Agricultural labor on

Exempt if performed by a individual who is

$1,000 or more (for all household employees)

page 16). Also see Domestic service in

under age 18 during any part of the calendar

in any calendar quarter in the current or

college clubs, fraternities, and sororities on

year and the work is not the principal

preceding year.

page 17.

occupation of the employee.

Insurance agents or solicitors:

1. Full-time life insurance salesperson.

Taxable.

Taxable if employee under common law and not

paid solely by commissions (applies to both 1

2. Other salesperson of life, casualty, etc.,

Taxable only if employee under common law.

and 2).

insurance.

Interest foregone on below-market loans

See Pub. 15-A.

related to compensation and deemed

original issue discount. See IRC section

7872 and its regulations for details.

Meals and lodging furnished free or at a

(a) Meals — Taxable unless furnished for employer’s convenience and on the employer’s premises.

discounted price to the employee. For

For information on the de minimis fringe exclusion, see IRC section 132(e).

household employees, agricultural labor, and

service not in the course of the employer’s

(b) Lodging — Taxable unless furnished on employer’s premises, for the employer’s convenience,

trade or business, see Noncash payments on

and as condition of employment.

page 19.

Ministers of churches performing duties as

Exempt.

such.

* Income derived by Native Americans exercising fishing rights is generally exempt from employment taxes.

* * Benefits provided under cafeteria plans may qualify for exclusion from wages for social security, Medicare, and FUTA taxes.

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Publication 80 - Circular Ss - Department Of The Treasury Page 18

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