TN 8 (11-93)

RS 01401.020 Wages for Social Security Purposes and Federal Income Tax Withholding Purposes

A. BACKGROUND

The Social Security Amendments of 1983 (P.L. 98-21) provide that an exclusion from “wages” for income tax withholding purposes does not require a similar exclusion from wages for social security purposes.

For social security purposes, the wage status of any payment will be determined based upon the provisions of section 209 of the Act, without regard to the income tax status of the payment.

B. POLICY

Internal Revenue Service (IRS) determines what payments are subject to Federal income tax withholding, Social Security and Medicare taxes.

SSA determines when and what amount of wages must be credited to the earnings record.

C. PROCEDURE

Refer all questions concerning the payment, refund or computation of Social Security taxes to the IRS.

  • Inform the inquirer that the IRS is responsible for determining what payments are subject to Social Security taxes.

  • Do not advise individuals on tax liability.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0301401020
RS 01401.020 - Wages for Social Security Purposes and Federal Income Tax Withholding Purposes - 08/31/2004
Batch run: 01/27/2009
Rev:08/31/2004