26 U.S.C. § 1401 — Rate of tax
submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 320 words · no verdicts yet
This section imposes self-employment taxes for old-age, survivors, and disability insurance and for hospital insurance. It also imposes an additional hospital-insurance tax on certain self-employment income above specified thresholds and exempts income covered exclusively by certain international agreements.
(a) Old-age, survivors, and disability insurance. In addition to other taxes, each individual must pay a tax for each tax year on the individual’s self-employment income. The tax is 12.4 percent of that income.
(b) Hospital insurance.
(1) In general. In addition to the tax under subsection (a), each individual must pay a tax for each tax year on self-employment income. The tax is 2.9 percent of that income.
(2) Additional tax.
(A) In general. In addition to the taxes under paragraph (1) and subsection (a), for each tax year beginning after December 31, 2012, every taxpayer* other than a corporation*, estate, or trust must pay a tax of 0.9 percent on the part of the taxpayer’s self-employment income above the applicable amount: $250,000 for a joint return*; one-half of $250,000 for a married taxpayer filing a separate return; and $200,000 in every other case.
(B) Coordination with FICA. The applicable threshold is reduced, but not below zero, by the amount of wages counted in determining the tax imposed on the taxpayer under section 3121(b)(2).
(c) Relief from taxes in cases covered by certain international agreements. While an agreement under section 233 of the Social Security Act with a foreign country is in effect, an individual’s self-employment income is exempt from the taxes in this section to the extent that the agreement makes that income subject exclusively to the laws applying to that foreign country’s social-security system.
In addition to other taxes, there shall be imposed for each taxable year*, on the self-employment income of every individual, a tax equal to 12.4 percent of the amount of the self-employment income for such taxable year.
In addition to the tax imposed by the preceding subsection, there shall be imposed for each taxable year, on the self-employment income of every individual, a tax equal to 2.9 percent of the amount of the self-employment income for such taxable year.
In addition to the tax imposed by paragraph (1) and the preceding subsection, there is hereby imposed on every taxpayer* (other than a corporation*, estate, or trust) for each taxable year beginning after December 31, 2012, a tax equal to 0.9 percent of the self-employment income for such taxable year which is in excess of—
in the case of a joint return*, $250,000,
in the case of a married taxpayer (as defined in section 7703) filing a separate return, ½ of the dollar amount determined under clause (i), and
in any other case, $200,000.
The amounts under clause (i), (ii), or (iii) (whichever is applicable) of subparagraph (A) shall be reduced (but not below zero) by the amount of wages taken into account in determining the tax imposed under section 3121(b)(2) with respect to the taxpayer.
During any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, the self-employment income of an individual shall be exempt from the taxes imposed by this section to the extent that such self-employment income is subject under such agreement exclusively to the laws applicable to the social security system of such foreign country.
Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 353; Sept. 1, 1954, ch. 1206, title II, § 208(a), 68 Stat. 1093; Aug. 1, 1956, ch. 836, title II, § 202(a), 70 Stat. 845; Pub. L. 85–840, title IV, § 401(a), Aug. 28, 1958, 72 Stat. 1041; Pub. L. 87–64, title II, § 201(a), June 30, 1961, 75 Stat. 140; Pub. L. 89–97, title I, § 111(c)(4), title III, § 321(a), July 30, 1965, 79 Stat. 342, 394; Pub. L. 90–248, title I, § 109(a)(1), (b)(1), Jan. 2, 1968, 81 Stat. 835, 836; Pub. L. 92–336, title II, § 204 (a)(1), (b)(1), July 1, 1972, 86 Stat. 420, 421; Pub. L. 92–603, title I, § 135(a)(1), (b)(1), Oct. 30, 1972, 86 Stat. 1362, 1363; Pub. L. 93–233, § 6(b)(1), Dec. 31, 1973, 87 Stat. 955; Pub. L. 94–455, title XIX, § 1901(a)(154), Oct. 4, 1976, 90 Stat. 1789; Pub. L. 95–216, title I, § 101(a)(3), (b)(3), title III, § 317(b)(1), Dec. 20, 1977, 91 Stat. 1511, 1512, 1539; Pub. L. 98–21, title I, § 124(a), (b), Apr. 20, 1983, 97 Stat. 89; Pub. L. 101–508, title XI, § 11801(a)(36), (c)(16), Nov. 5, 1990, 104 Stat. 1388–521, 1388–527; Pub. L. 108–203, title IV, § 415, Mar. 2, 2004, 118 Stat. 530; Pub. L. 111–148, title IX, § 9015(b)(1), title X, § 10906(b), Mar. 23, 2010, 124 Stat. 871, 1020; Pub. L. 111–152, title I, § 1402(b)(1)(B), Mar. 30, 2010, 124 Stat. 1063; Pub. L. 113–295, div. A, title II, § 221(a)(89), (90), Dec. 19, 2014, 128 Stat. 4050.)
- 1954Enacted · Act of Aug. 16, 1954, ch. 736
- 1954Amended · Act of Sept. 1, 1954, ch. 1206 · 68 Stat. 1093
- 1956Amended · Act of Aug. 1, 1956, ch. 836 · 70 Stat. 845
- 1958Amended · Pub. L. 85-840 · 72 Stat. 1041
- 1961Amended · Pub. L. 87-64 · 75 Stat. 140
- 1965Amended · Pub. L. 89-97 · 79 Stat. 342, 394
- 1968Amended · Pub. L. 90-248 · 81 Stat. 835, 836
- 1972Amended · Pub. L. 92-336 · 86 Stat. 420, 421
- 1972Amended · Pub. L. 92-603 · 86 Stat. 1362, 1363
- 1973Amended · Pub. L. 93-233 · 87 Stat. 955
- 1976Amended · Pub. L. 94-455 · 90 Stat. 1789
- 1977Amended · Pub. L. 95-216 · 91 Stat. 1511, 1512, 1539
- 1983Amended · Pub. L. 98-21 · 97 Stat. 89
- 1990Amended · Pub. L. 101-508 · 104 Stat. 1388
- 2004Amended · Pub. L. 108-203 · 118 Stat. 530
- 2010Amended · Pub. L. 111-148 · 124 Stat. 871, 1020
- 2010Amended · Pub. L. 111-152 · 124 Stat. 1063
- 2014Amended · Pub. L. 113-295 · 128 Stat. 4050
A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.
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