TN 8 (11-93)

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.