TN 23 (06-10)
Citations: Social Security Act , Secs. 209(a)-(k); 20 CFR 404.1041
The following are definitions for wages, wage exclusions, payments that are not wages
and qualified plans or benefits.
Means all remuneration for services performed in an employment relationship not excluded
by the Act.
Refers to wages, which at the time of payment, are either totally or partly excluded
from being treated as wages under a provision in Sections 209(a)-(k) of the Act.
Means remuneration, which may arise from an employment relationship but is not payment
for work performed.
As used in qualified plans, qualified benefits, etc., refers to having complied with
or met specific requirements or conditions of the Internal Revenue Code (IRC) and/or
This subchapter explains the various wage exclusions and outlines the basic policies
and rules which apply and must be followed in establishing when a payment qualifies
as a wage exclusion under the Act.
These instructions make extensive reference to the IRC because many of the wage exclusions
under the Act are predicated on the payments having been made pursuant to provisions
in one or more sections of the IRC. Generally, under the IRC all or part of these
payments are tax-exempt or taxation is deferred to a later point in time.
A payment arising from an employment situation qualifies as a wage exclusion only
The payment is specifically excluded from being treated as wages in Sections 209(a)-(k)
of the Act, and
The payment is made on the employer's behalf with the employer's own funds, to or
on behalf of the employee, to or from a plan established by the employer, and
The employee does not have the option to take the employer's contribution in cash.
EXCEPTION: For cafeteria plans, see RS 01402.030.
SSA does not interpret the IRC. It is the responsibility of the employer or employee
to furnish, when requested by SSA, the documentation necessary to establish that the
provisions of the applicable section of the IRC have been met.