§3111 — Rate of tax
30 cases·3 followed·27 cited—10% support
Statute Text — 26 U.S.C. §3111
In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 6.2 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).
In addition to the tax imposed by the preceding subsection, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 1.45 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).
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, wages received by or paid to an individual shall be exempt from the taxes imposed by this section to the extent that such wages are subject under such agreement exclusively to the laws applicable to the social security system of such foreign country.
If a qualified tax-exempt organization hires a qualified veteran with respect to whom a credit would be allowable under section 38 by reason of section 51 if the organization were not a qualified tax-exempt organization, then there shall be allowed as a credit against the tax imposed by subsection (a) on wages paid with respect to employment of all employees of the organization during the applicable period an amount equal to the credit determined under section 51 (after application of the modifications under paragraph (3)) with respect to wages paid to such qualified veteran during such period.
The aggregate amount allowed as a credit under this subsection for all qualified veterans for any period with respect to which tax is imposed under subsection (a) shall not exceed the amount of the tax imposed by subsection (a) on wages paid with respect to employment of all employees of the organization during such period.
For purposes of paragraph (1), section 51 shall be applied—
by substituting “26 percent” for “40 percent” in subsection (a) thereof,
by substituting “16.25 percent” for “25 percent” in subsection (i)(3)(A) thereof, and
by only taking into account wages paid to a qualified veteran for services in furtherance of the activities related to the purpose or function constituting the basis of the organization’s exemption under section 501.
The term “applicable period” means, with respect to any qualified veteran, the 1-year period beginning with the day such qualified veteran begins work for the organization.
For purposes of this subsection—
the term “qualified tax-exempt organization” means an employer that is an organization described in section 501(c) and exempt from taxation under section 501(a), and
the term “qualified veteran” has the meaning given such term by section 51(d)(3).
In the case of a taxpayer who has made an election under section 41(h) for a taxable year—
there shall be allowed as a credit against the tax imposed by subsection (a) for the first calendar quarter which begins after the date on which the taxpayer files the return specified in section 41(h)(4)(A)(ii) an amount equal to so much of the payroll tax credit portion determined under section 41(h)(2) as does not exceed the limitation of subclause (I) of section 41(h)(4)(B)(i) (applied without regard to subclause (II) thereof), and
there shall be allowed as a credit against the tax imposed by subsection (b) for the first calendar quarter which begins after the date on which the taxpayer files the return specified in section 41(h)(4)(A)(ii) an amount equal to so much of the payroll tax credit portion determined under section 41(h)(2) as is not allowed as a credit under subparagraph (A).
The credit allowed by paragraph (1)(A) shall not exceed the tax imposed by subsection (a) for any calendar quarter, and the credit allowed by paragraph (1)(B) shall not exceed the tax imposed by subsection (b) for any calendar quarter, on the wages paid with respect to the employment of all individuals in the employ of the employer.
If the amount of any credit under paragraph (1) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be carried to the succeeding calendar quarter and allowed as a credit under paragraph (1) for such quarter.
The credits allowed under paragraph (1) shall not be taken into account for purposes of determining the amount of any deduction allowed under chapter 1 for taxes imposed under subsection (a) or (b).
Treasury Regulations
- Treas. Reg. §Treas. Reg. §31.3111-1 Measure of employer tax
- Treas. Reg. §Treas. Reg. §31.3111-2 Rates and computation of employer tax
- Treas. Reg. §Treas. Reg. §31.3111-2(a) Old-age, survivors, and disability insurance.
- Treas. Reg. §Treas. Reg. §31.3111-2(b) Hospital insurance.
- Treas. Reg. §Treas. Reg. §31.3111-2(c) Computation of employer tax.
- Treas. Reg. §Treas. Reg. §31.3111-3 When employer tax attaches
- Treas. Reg. §Treas. Reg. §31.3111-4 Liability for employer tax
- Treas. Reg. §Treas. Reg. §31.3111-5 Manner and time of payment of employer tax
- Treas. Reg. §Treas. Reg. §31.3111-6 Recapture of credits under the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act
- Treas. Reg. §Treas. Reg. §31.3111-6(a) Recapture of erroneously refunded credits under the Families First Coronavirus Response Act.
- Treas. Reg. §Treas. Reg. §31.3111-6(b) Recapture of erroneously refunded credits under the Coronavirus Aid, Relief, and Economic Security Act.
- Treas. Reg. §Treas. Reg. §31.3111-6(c) Advance credit amounts erroneously refunded.
- Treas. Reg. §Treas. Reg. §31.3111-6(d) Third party payors.
- Treas. Reg. §Treas. Reg. §31.3111-6(e) Applicability date.
30 Citing Cases
In particular, section 3111 imposes taxes on employers under FICA (pertaining to Social Security) based on wages paid to employees.
taxes on wages received with respect to employment. The FICA tax is a tax on wages (up to an annual limit) that comprises a 12.4% Social Security tax and a 2.9% Medicare tax. Secs. 3101, 3111. One halfofthe FICA tax is imposed on the employer, see sec. 3111, and the other halfon the employee, see sec. 3101. Section 3102(a) requires an employer to withhold from wages the amount ofthe tax imposed on its employee, and the employer is liable for paying the tax it is required to so withhold. Sec. 31
31.6302-1(e)(1) (2005) to include (1) "The employer tax under section 3111", that is, the employer share ofFICA, (2)"The employee portion ofthe tax withheld under section 3102", that is, employee FICA withholding, and (3)."The income tax withheld under sections 3402 and 3405, that is, income-tax withholding.
ned that D&R was liable for the following additions to tax under section 6651(a) (1) : 4Sec. 3402 requires employers to withhold income tax from employee wages . The Federal Insurance Contributions Act (i) taxes employers a percentage of wages paid, sec. 3111; (ii) taxes employees a percentage of wages received, sec. 3101; and (iii) requires employers to withhold the tax on employees from employee wages, sec. 3102 (a) . The Federal Unemployment Tax Act taxes employers a percentage of the wages p
3111,(a) and (b). All these liabilities are reported on Form 941., Employer's Quarterly Federal Tax Return. Section 6672(a) imposes a penalty on persons, other than'the employer, -who'are.responsiblesforswithholding -taxes. Liability under section 6672 is different from the employer's liability for payment of" tax required to be withheld. See
Section 3121(d) (3) (C) Section 3111 imposes on employers a FICA tax that is based on the wages paid to employees.
those .temporar laborers . For those temporary laborers, it withheld Federal ncome taxes under section 3402 . It also withheld those to porary laborers' shares of FICA taxes under section 3102 and pai its own corresponding share of FICA taxes under section 3111 . In contrast, petitioner did not require temporary laborers paid :1 I - 8 Yi identification for Federal income tax purposes or to prepare th e , I 0 documents necessary for . payroll tax deductions . It did not issue to;` temporary labor
those temporary laborers. For those temporary laborers, it withheld Federal income taxes under section 3402. It also withheld those temporary laborers’ shares of FICA taxes under section 3102 and paid its own corresponding share of FICA taxes under section 3111. In contrast, petitioner did not require temporary laborers paid in cash to produce proper identification for Federal income tax purposes or to prepare the documents necessary for payroll tax deductions. It did not issue to temporary labo
taxes. Corporate employment taxes include the following: (1) The employees’ Federal income taxes, secs. 3401 and 3402, (2) the employees’ shares of Federal Insurance Contributions Act (FICA) taxes, sec. 3101, (3) the employer’s share of FICA taxes, sec. 3111, and (4) employer’s Federal Unemployment Tax Act (FUTA) taxes, sec. 3301. Employers are liable for deducting and withholding from their employees’ salaries or wages the employees’ shares of Federal income and FICA taxes. Secs. 162(a), 3102(
Section 3111 imposes a tax on employers; petitioners have no right to claim Allstate's potential tax refund. Section 6521 offers no support for petitioners' claim. It deals exclusively with SECA tax and "the tax imposed by section 3101 (relating to tax on employees under the Federal Insurance Contribution Act)". (Emphasis added.) Cf. sec. 3111. Pet