26 U.S.C. §3401(d)
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CHAPTER 24 > § 3401
§ 3401. Definitions
(d) Employer
For purposes of this chapter, the term “employer” means the person
for whom an individual performs or performed any service, of whatever
nature, as the employee of such person, except that—
(1) if the person for whom the individual performs or performed
the services does not have control of the payment of the wages for
such services, the term “employer” (except for purposes of subsection
(a)) means the person having control of the payment of such wages,
and
(2) in the case of a person paying wages on behalf of a nonresident
alien individual, foreign partnership, or foreign corporation, not
engaged in trade or business within the United States, the term
“employer” (except for purposes of subsection (a)) means such person.
(a) Every person is an
employer if he employs one or more employees.
Neither the number of employees employed
nor the period during which any such employee
is employed is material for the purpose of determining whether the person
for whom the services are performed is an employer.
(b) An employer may be
an individual, a corporation, a partnership,
a trust, an estate, a joint-stock company, an association, or a syndicate,
group, pool, joint venture, or other unincorporated organization, group,
or entity. A trust or estate, rather than the fiduciary acting for on
behalf of the trust or estate, is generally the employer.
(c) Although a person may
be an employer under this section, services performed in his employ
may be of such a nature, or performed under such circumstances, as not
to constitute employment (see §31.3121(b)–3).
(b) Employment
For purposes of this
chapter, the term "employment" means any service, of whatever nature,
performed
(A) by an employee for the person employing him, irrespective
of the citizenship or residence of either,
(i) within the
United States, or
(ii) on
or in connection with an American vessel or American aircraft
under a contract of service which is entered into within the
United States or during the performance
of which and while the employee is employed on the vessel or
aircraft it touches at a port in the United States, if the employee
is employed on and in connection with such vessel or aircraft
when outside the United States, or
(B) outside the United
States by a citizen or resident of the United States as an employee
for an American employer (as defined in subsection (h)), or
(C)
if it is service, regardless of where or by whom performed, which
is designated as employment or recognized as equivalent to employment
under an agreement entered into under section 233 of the Social
Security Act; except that such term shall not include -
(h) American employer
For purposes of this chapter
[Chapter 21, Federal Insurance Contributions Act (FICA)], the term "American
employer" means an employer which is -
(1) the United States or
any instrumentality thereof,
(2) an individual who is a resident
of the United States,
(3) a partnership, if two-thirds or more of
the partners are residents of the United States,
(4) a trust, if
all of the trustees are residents of the United States, or
(5) a
corporation organized under the laws of the United States or of any
State.
(a)
Meaning of terms—
(1)
Services not in the course of employer's
trade or business. The term “services
not in the course of the employer's trade
or business” includes services that do not promote or advance the
trade or business of the employer. Such term does not include services
performed for a corporation. As used in this section, the term does
not include service not in the course of the employer's
trade or business performed on a farm
operated for profit or domestic service in a private home of the employer.
See paragraph (f) of §31.3121(g)–1 for provisions relating to services
not in the course of the employer's trade
or business performed on a farm operated for profit.
(2)
Domestic service in a private home of the employer. Services of a household
nature performed by an employee in or about a private home of the person
by whom he is employed constitute domestic service in a private home
of the employer. A private home is a fixed place of abode of an individual
or family. A separate and distinct dwelling unit maintained by an individual
in an apartment house, hotel, or other similar establishment may constitute
a private home. If a dwelling house is used primarily as a boarding
or lodging house for the purpose of supplying board or lodging to the
public as a business enterprise, it is not a private home. In general,
services of a household nature in or about a private home include services
performed by cooks, waiters, butlers, housekeepers, governesses, maids,
valets, baby sitters, janitors, laundresses, furnacemen, caretakers,
handymen, gardeners, footmen, grooms, and chauffeurs of automobiles
for family use. The term “domestic service in a private home of the
employer” does not include the services enumerated above unless such
services are performed in or about a private home of the employer. Services
not of a household nature, such as services performed as a private secretary,
tutor, or librarian, even though performed in the employer's home, are
not included within the term “domestic service in a private home of
the employer”. As used in this section, the term does not include domestic
service in a private home of the employer performed on a farm operated
for profit or service not in the course of the employer's
trade or business. See paragraph (f)
§31.3121(g)–1 for provisions relating to domestic service in a private
home of the employer performed on a farm operated for profit.
(b)
Payments other than in cash. The term “wages”
does not include remuneration paid in any medium other than cash (1)
for service not in the course of the employer's
trade or business, or (2) for domestic
service in a private home of the employer. Cash remuneration includes
checks and other monetary media of exchange. Remuneration paid in any
medium other than cash, such as lodging, food, clothing, car tokens,
transportation passes or tickets, or other goods or commodities, for
service not in the course of the employer's
trade or business or for domestic
service in a private home of the employer does not constitute wages.
(c)
Cash payments. (1) The term “wages” does not
include cash remuneration paid by an employer in any calendar quarter
after 1954 to an employee for—
(i)
Domestic service in a private home of the employer, or
(ii)
Service not in the course of the employer's
trade or business, unless the cash
remuneration paid in such quarter by the employer to the employee for
such service is $50 or more.
(2)
The test relating to cash remuneration of $50 or more is based on the
remuneration paid in a calendar quarter rather than on the remuneration
earned during a calendar quarter. It is immaterial whether the remuneration
was earned before 1955 or after 1954.
Example. In the calendar quarter ending March 31,
1955, employer X pays employee A cash remuneration of $50 for service
not in the course of X's trade or business. Such remuneration constitutes
wages subject to the taxes even though $10 thereof represents payment
for such service performed by A for X in December 1954.
In
determining whether $50 or more has been paid either for domestic service
in a private home of the employer or for service not in the course of
the employer's trade or business,
only cash remuneration for such service shall be taken into account.
Cash remuneration includes checks and other monetary media of exchange.
Remuneration paid in any other medium, such as lodging, food, clothing,
car tokens, transportation passes or tickets, or other goods or commodities,
is disregarded in determining whether the cash-remuneration test is
met. If an employee receives cash remuneration from an employer in a
calendar quarter for both types of services the $50 cash-remuneration
test is to be applied separately to each type of service. If an employee
receives cash remuneration from more than one employer in a calendar
quarter for domestic service in a private home of the employer or for
service not in the course of the employer's
trade or business, the $50 cash-remuneration
test is to be applied separately to the remuneration received from each
employer. See §31.3102–1, relating to deduction of employee tax or amounts
equivalent to the tax from cash payments for the services described
in this section; §31.3121(a)–2, relating to time of payment of wages
for such services; and §31.3121(i)–1, relating to computations to the
nearest dollar of any payment of cash remuneration for domestic service
in a private home of the employer.
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