§ 3402. — Income tax collected at source.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 26USC3402]
TITLE 26--INTERNAL REVENUE CODE
Subtitle C--Employment Taxes
CHAPTER 24--COLLECTION OF INCOME TAX AT SOURCE ON WAGES
Sec. 3402. Income tax collected at source
(a) Requirement of withholding
(1) In general
Except as otherwise provided in this section, every employer
making payment of wages shall deduct and withhold upon such wages a
tax determined in accordance with tables or computational procedures
prescribed by the Secretary. Any tables or procedures prescribed
under this paragraph shall--
(A) apply with respect to the amount of wages paid during
such periods as the Secretary may prescribe, and
(B) be in such form, and provide for such amounts to be
deducted and withheld, as the Secretary determines to be most
appropriate to carry out the purposes of this chapter and to
reflect the provisions of chapter 1 applicable to such periods.
(2) Amount of wages
For purposes of applying tables or procedures prescribed under
paragraph (1), the term ``the amount of wages'' means the amount by
which the wages exceed the number of withholding exemptions claimed
multiplied by the amount of one such exemption. The amount of each
withholding exemption shall be equal to the amount of one personal
exemption provided in section 151(b), prorated to the payroll
period. The maximum number of withholding exemptions permitted shall
be calculated in accordance with regulations prescribed by the
Secretary under this section, taking into account any reduction in
withholding to which an employee is entitled under this section.
(b) Percentage method of withholding
(1) If wages are paid with respect to a period which is not a
payroll period, the withholding exemption allowable with respect to each
payment of such wages shall be the exemption allowed for a miscellaneous
payroll period containing a number of days (including Sundays and
holidays) equal to the number of days in the period with respect to
which such wages are paid.
(2) In any case in which wages are paid by an employer without
regard to any payroll period or other period, the withholding exemption
allowable with respect to each payment of such wages shall be the
exemption allowed for a miscellaneous payroll period containing a number
of days equal to the number of days (including Sundays and holidays)
which have elapsed since the date of the last payment of such wages by
such employer during the calendar year, or the date of commencement of
employment with such employer during such year, or January 1 of such
year, whichever is the later.
(3) In any case in which the period, or the time described in
paragraph (2), in respect of any wages is less than one week, the
Secretary, under regulations prescribed by him, may authorize an
employer to compute the tax to be deducted and withheld as if the
aggregate of the wages paid to the employee during the calendar week
were paid for a weekly payroll period.
(4) In determining the amount to be deducted and withheld under this
subsection, the wages may, at the election of the employer, be computed
to the nearest dollar.
(c) Wage bracket withholding
(1) At the election of the employer with respect to any employee,
the employer shall deduct and withhold upon the wages paid to such
employee a tax (in lieu of the tax required to be deducted and withheld
under subsection (a)) determined in accordance with tables prescribed by
the Secretary in accordance with paragraph (6).
(2) If wages are paid with respect to a period which is not a
payroll period, the amount to be deducted and withheld shall be that
applicable in the case of a miscellaneous payroll period containing a
number of days (including Sundays and holidays) equal to the number of
days in the period with respect to which such wages are paid.
(3) In any case in which wages are paid by an employer without
regard to any payroll period or other period, the amount to be deducted
and withheld shall be that applicable in the case of a miscellaneous
payroll period containing a number of days equal to the number of days
(including Sundays and holidays) which have elapsed since the date of
the last payment of such wages by such employer during the calendar
year, or the date of commencement of employment with such employer
during such year, or January 1 of such year, whichever is the later.
(4) In any case in which the period, or the time described in
paragraph (3), in respect of any wages is less than one week, the
Secretary, under regulations prescribed by him, may authorize an
employer to determine the amount to be deducted and withheld under the
tables applicable in the case of a weekly payroll period, in which case
the aggregate of the wages paid to the employee during the calendar week
shall be considered the weekly wages.
(5) If the wages exceed the highest wage bracket, in determining the
amount to be deducted and withheld under this subsection, the wages may,
at the election of the employer, be computed to the nearest dollar.
(6) In the case of wages paid after December 31, 1969, the amount
deducted and withheld under paragraph (1) shall be determined in
accordance with tables prescribed by the Secretary. In the tables so
prescribed, the amounts set forth as amounts of wages and amounts of
income tax to be deducted and withheld shall be computed on the basis of
the table for an annual payroll period prescribed pursuant to subsection
(a).
(d) Tax paid by recipient
If the employer, in violation of the provisions of this chapter,
fails to deduct and withhold the tax under this chapter, and thereafter
the tax against which such tax may be credited is paid, the tax so
required to be deducted and withheld shall not be collected from the
employer; but this subsection shall in no case relieve the employer from
liability for any penalties or additions to the tax otherwise applicable
in respect of such failure to deduct and withhold.
(e) Included and excluded wages
If the remuneration paid by an employer to an employee for services
performed during one-half or more of any payroll period of not more than
31 consecutive days constitutes wages, all the remuneration paid by such
employer to such employee for such period shall be deemed to be wages;
but if the remuneration paid by an employer to an employee for services
performed during more than one-half of any such payroll period does not
constitute wages, then none of the remuneration paid by such employer to
such employee for such period shall be deemed to be wages.
(f) Withholding exemptions
(1) In general
An employee receiving wages shall on any day be entitled to the
following withholding exemptions:
(A) an exemption for himself unless he is an individual
described in section 151(d)(2);
(B) if the employee is married, any exemption to which his
spouse is entitled, or would be entitled if such spouse were an
employee receiving wages, under subparagraph (A) or (D), but
only if such spouse does not have in effect a withholding
exemption certificate claiming such exemption;
(C) an exemption for each individual with respect to whom,
on the basis of facts existing at the beginning of such day,
there may reasonably be expected to be allowable an exemption
under section 151(c) for the taxable year under subtitle A in
respect of which amounts deducted and withheld under this
chapter in the calendar year in which such day falls are allowed
as a credit;
(D) any allowance to which he is entitled under subsection
(m), but only if his spouse does not have in effect a
withholding exemption certificate claiming such allowance; and
(E) a standard deduction allowance which shall be an amount
equal to one exemption (or more than one exemption if so
prescribed by the Secretary) unless (i) he is married (as
determined under section 7703) and his spouse is an employee
receiving wages subject to withholding or (ii) he has
withholding exemption certificates in effect with respect to
more than one employer.
For purposes of this title, any standard deduction allowance under
subparagraph (E) shall be treated as if it were denominated a
withholding exemption.
(2) Exemption certificates
(A) On commencement of employment
On or before the date of the commencement of employment with
an employer, the employee shall furnish the employer with a
signed withholding exemption certificate relating to the number
of withholding exemptions which he claims, which shall in no
event exceed the number to which he is entitled.
(B) Change of status
If, on any day during the calendar year, the number of
withholding exemptions to which the employee is entitled is less
than the number of withholding exemptions claimed by the
employee on the withholding exemption certificate then in effect
with respect to him, the employee shall within 10 days
thereafter furnish the employer with a new withholding exemption
certificate relating to the number of withholding exemptions
which the employee then claims, which shall in no event exceed
the number to which he is entitled on such day. If, on any day
during the calendar year, the number of withholding exemptions
to which the employee is entitled is greater than the number of
withholding exemptions claimed, the employee may furnish the
employer with a new withholding exemption certificate relating
to the number of withholding exemptions which the employee then
claims, which shall in no event exceed the number to which he is
entitled on such day.
(C) Change of status which affects next calendar year
If on any day during the calendar year the number of
withholding exemptions to which the employee will be, or may
reasonably be expected to be, entitled at the beginning of his
next taxable year under subtitle A is different from the number
to which the employee is entitled on such day, the employee
shall, in such cases and at such times as the Secretary may by
regulations prescribe, furnish the employer with a withholding
exemption certificate relating to the number of withholding
exemptions which he claims with respect to such next taxable
year, which shall in no event exceed the number to which he will
be, or may reasonably be expected to be, so entitled.
(3) When certificate takes effect
(A) First certificate furnished
A withholding exemption certificate furnished the employer
in cases in which no previous such certificate is in effect
shall take effect as of the beginning of the first payroll
period ending, or the first payment of wages made without regard
to a payroll period, on or after the date on which such
certificate is so furnished.
(B) Furnished to take place of existing certificate
(i) In general
Except as provided in clauses (ii) and (iii), a
withholding exemption certificate furnished to the employer
in cases in which a previous such certificate is in effect
shall take effect as of the beginning of the 1st payroll
period ending (or the 1st payment of wages made without
regard to a payroll period) on or after the 30th day after
the day on which such certificate is so furnished.
(ii) Employer may elect earlier effective date
At the election of the employer, a certificate described
in clause (i) may be made effective beginning with any
payment of wages made on or after the day on which the
certificate is so furnished and before the 30th day referred
to in clause (i).
(iii) Change of status which affects next year
Any certificate furnished pursuant to paragraph (2)(C)
shall not take effect, and may not be made effective, with
respect to any payment of wages made in the calendar year in
which the certificate is furnished.
(4) Period during which certificate remains in effect
A withholding exemption certificate which takes effect under
this subsection, or which on December 31, 1954, was in effect under
the corresponding subsection of prior law, shall continue in effect
with respect to the employer until another such certificate takes
effect under this subsection.
(5) Form and contents of certificate
Withholding exemption certificates shall be in such form and
contain such information as the Secretary may by regulations
prescribe.
(6) Exemption of certain nonresident aliens
Notwithstanding the provisions of paragraph (1), a nonresident
alien individual (other than an individual described in section
3401(a)(6)(A) or (B)) shall be entitled to only one withholding
exemption.
(7) Exemption where certificate with another employer is in
effect
If a withholding exemption certificate is in effect with respect
to one employer, an employee shall not be entitled under a
certificate in effect with any other employer to any withholding
exemption which he has claimed under such first certificate.
(g) Overlapping pay periods, and payment by agent or fiduciary
If a payment of wages is made to an employee by an employer--
(1) with respect to a payroll period or other period, any part
of which is included in a payroll period or other period with
respect to which wages are also paid to such employee by such
employer, or
(2) without regard to any payroll period or other period, but on
or prior to the expiration of a payroll period or other period with
respect to which wages are also paid to such employee by such
employer, or
(3) with respect to a period beginning in one and ending in
another calendar year, or
(4) through an agent, fiduciary, or other person who also has
the control, receipt, custody, or disposal of, or pays, the wages
payable by another employer to such employee,
the manner of withholding and the amount to be deducted and withheld
under this chapter shall be determined in accordance with regulations
prescribed by the Secretary under which the withholding exemption
allowed to the employee in any calendar year shall approximate the
withholding exemption allowable with respect to an annual payroll
period.
(h) Alternative methods of computing amount to be withheld
The Secretary may, under regulations prescribed by him, authorize--
(1) Withholding on basis of average wages
An employer--
(A) to estimate the wages which will be paid to any employee
in any quarter of the calendar year,
(B) to determine the amount to be deducted and withheld upon
each payment of wages to such employee during such quarter as if
the appropriate average of the wages so estimated constituted
the actual wages paid, and
(C) to deduct and withhold upon any payment of wages to such
employee during such quarter (and, in the case of tips referred
to in subsection (k), within 30 days thereafter) such amount as
may be necessary to adjust the amount actually deducted and
withheld upon the wages of such employee during such quarter to
the amount required to be deducted and withheld during such
quarter without regard to this subsection.
(2) Withholding on basis of annualized wages
An employer to determine the amount of tax to be deducted and
withheld upon a payment of wages to an employee for a payroll period
by--
(A) multiplying the amount of an employee's wages for a
payroll period by the number of such payroll periods in the
calendar year,
(B) determining the amount of tax which would be required to
be deducted and withheld upon the amount determined under
subparagraph (A) if such amount constituted the actual wages for
the calendar year and the payroll period of the employee were an
annual payroll period, and
(C) dividing the amount of tax determined under subparagraph
(B) by the number of payroll periods (described in subparagraph
(A)) in the calendar year.
(3) Withholding on basis of cumulative wages
An employer, in the case of any employee who requests to have
the amount of tax to be withheld from his wages computed on the
basis of his cumulative wages, to--
(A) add the amount of the wages to be paid to the employee
for the payroll period to the total amount of wages paid by the
employer to the employee during the calendar year,
(B) divide the aggregate amount of wages computed under
subparagraph (A) by the number of payroll periods to which such
aggregate amount of wages relates,
(C) compute the total amount of tax that would have been
required to be deducted and withheld under subsection (a) if the
average amount of wages (as computed under subparagraph (B)) had
been paid to the employee for the number of payroll periods to
which the aggregate amount of wages (computed under subparagraph
(A)) relates,
(D) determine the excess, if any, of the amount of tax
computed under subparagraph (C) over the total amount of tax
deducted and withheld by the employer from wages paid to the
employee during the calendar year, and
(E) deduct and withhold upon the payment of wages (referred
to in subparagraph (A)) to the employee an amount equal to the
excess (if any) computed under subparagraph (D).
(4) Other methods
An employer to determine the amount of tax to be deducted and
withheld upon the wages paid to an employee by any other method
which will require the employer to deduct and withhold upon such
wages substantially the same amount as would be required to be
deducted and withheld by applying subsection (a) or (c), either with
respect to a payroll period or with respect to the entire taxable
year.
(i) Changes in withholding
(1) In general
The Secretary may by regulations provide for increases in the
amount of withholding otherwise required under this section in cases
where the employee requests such changes.
(2) Treatment as tax
Any increased withholding under paragraph (1) shall for all
purposes be considered tax required to be deducted and withheld
under this chapter.
(j) Noncash remuneration to retail commission salesman
In the case of remuneration paid in any medium other than cash for
services performed by an individual as a retail salesman for a person,
where the service performed by such individual for such person is
ordinarily performed for remuneration solely by way of cash commission
an employer shall not be required to deduct or withhold any tax under
this subchapter with respect to such remuneration, provided that such
employer files with the Secretary such information with respect to such
remuneration as the Secretary may by regulation prescribe.
(k) Tips
In the case of tips which constitute wages, subsection (a) shall be
applicable only to such tips as are included in a written statement
furnished to the employer pursuant to section 6053(a), and only to the
extent that the tax can be deducted and withheld by the employer, at or
after the time such statement is so furnished and before the close of
the calendar year in which such statement is furnished, from such wages
of the employee (excluding tips, but including funds turned over by the
employee to the employer for the purpose of such deduction and
withholding) as are under the control of the employer; and an employer
who is furnished by an employee a written statement of tips (received in
a calendar month) pursuant to section 6053(a) to which paragraph (16)(B)
of section 3401(a) is applicable may deduct and withhold the tax with
respect to such tips from any wages of the employee (excluding tips)
under his control, even though at the time such statement is furnished
the total amount of the tips included in statements furnished to the
employer as having been received by the employee in such calendar month
in the course of his employment by such employer is less than $20. Such
tax shall not at any time be deducted and withheld in an amount which
exceeds the aggregate of such wages and funds (including funds turned
over under section 3102(c)(2) or section 3202(c)(2)) minus any tax
required by section 3102(a) or section 3202(a) to be collected from such
wages and funds.
(l) Determination and disclosure of marital status
(1) Determination of status by employer
For purposes of applying the tables in subsections (a) and (c)
to a payment of wages, the employer shall treat the employee as a
single person unless there is in effect with respect to such payment
of wages a withholding exemption certificate furnished to the
employer by the employee after the date of the enactment of this
subsection indicating that the employee is married.
(2) Disclosure of status by employee
An employee shall be entitled to furnish the employer with a
withholding exemption certificate indicating he is married only if,
on the day of such furnishing, he is married (determined with the
application of the rules in paragraph (3)). An employee whose
marital status changes from married to single shall, at such time as
the Secretary may by regulations prescribe, furnish the employer
with a new withholding exemption certificate.
(3) Determination of marital status
For purposes of paragraph (2), an employee shall on any day be
considered--
(A) as not married, if (i) he is legally separated from his
spouse under a decree of divorce or separate maintenance, or
(ii) either he or his spouse is, or on any preceding day within
the calendar year was, a nonresident alien; or
(B) as married, if (i) his spouse (other than a spouse
referred to in subparagraph (A)) died within the portion of his
taxable year which precedes such day, or (ii) his spouse died
during one of the two taxable years immediately preceding the
current taxable year and, on the basis of facts existing at the
beginning of such day, the employee reasonably expects, at the
close of his taxable year, to be a surviving spouse (as defined
in section 2(a)).
(m) Withholding allowances
Under regulations prescribed by the Secretary, an employee shall be
entitled to additional withholding allowances or additional reductions
in withholding under this subsection. In determining the number of
additional withholding allowances or the amount of additional reductions
in withholding under this subsection, the employee may take into account
(to the extent and in the manner provided by such regulations)--
(1) estimated itemized deductions allowable under chapter 1
(other than the deductions referred to in section 151 and other than
the deductions required to be taken into account in determining
adjusted gross income under section 62(a) (other than paragraph (10)
thereof)),
(2) estimated tax credits allowable under chapter 1, and
(3) such additional deductions (including the additional
standard deduction under section 63(c)(3) for the aged and blind)
and other items as may be specified by the Secretary in regulations.
(n) Employees incurring no income tax liability
Notwithstanding any other provision of this section, an employer
shall not be required to deduct and withhold any tax under this chapter
upon a payment of wages to an employee if there is in effect with
respect to such payment a withholding exemption certificate (in such
form and containing such other information as the Secretary may
prescribe) furnished to the employer by the employee certifying that the
employee--
(1) incurred no liability for income tax imposed under subtitle
A for his preceding taxable year, and
(2) anticipates that he will incur no liability for income tax
imposed under subtitle A for his current taxable year.
The Secretary shall by regulations provide for the coordination of the
provisions of this subsection with the provisions of subsection (f).
(o) Extension of withholding to certain payments other than wages
(1) General rule
For purposes of this chapter (and so much of subtitle F as
relates to this chapter)--
(A) any supplemental unemployment compensation benefit paid
to an individual,
(B) any payment of an annuity to an individual, if at the
time the payment is made a request that such annuity be subject
to withholding under this chapter is in effect, and
(C) any payment to an individual of sick pay which does not
constitute wages (determined without regard to this subsection),
if at the time the payment is made a request that such sick pay
be subject to withholding under this chapter is in effect,
shall be treated as if it were a payment of wages by an employer to
an employee for a payroll period.
(2) Definitions
(A) Supplemental unemployment compensation benefits
For purposes of paragraph (1), the term ``supplemental
unemployment compensation benefits'' means amounts which are
paid to an employee, pursuant to a plan to which the employer is
a party, because of an employee's involuntary separation from
employment (whether or not such separation is temporary),
resulting directly from a reduction in force, the discontinuance
of a plant or operation, or other similar conditions, but only
to the extent such benefits are includible in the employee's
gross income.
(B) Annuity
For purposes of this subsection, the term ``annuity'' means
any amount paid to an individual as a pension or annuity.
(C) Sick pay
For purposes of this subsection, the term ``sick pay'' means
any amount which--
(i) is paid to an employee pursuant to a plan to which
the employer is a party, and
(ii) constitutes remuneration or a payment in lieu of
remuneration for any period during which the employee is
temporarily absent from work on account of sickness or
personal injuries.
(3) Amount withheld from annuity payments or sick pay
If a payee makes a request that an annuity or any sick pay be
subject to withholding under this chapter, the amount to be deducted
and withheld under this chapter from any payment to which such
request applies shall be an amount (not less than a minimum amount
determined under regulations prescribed by the Secretary) specified
by the payee in such request. The amount deducted and withheld with
respect to a payment which is greater or less than a full payment
shall bear the same relation to the specified amount as such payment
bears to a full payment.
(4) Request for withholding
A request that an annuity or any sick pay be subject to
withholding under this chapter--
(A) shall be made by the payee in writing to the person
making the payments and shall contain the social security number
of the payee,
(B) shall specify the amount to be deducted and withheld
from each full payment, and
(C) shall take effect--
(i) in the case of sick pay, with respect to payments
made more than 7 days after the date on which such request
is furnished to the payor, or
(ii) in the case of an annuity, at such time (after the
date on which such request is furnished to the payor) as the
Secretary shall by regulations prescribe.
Such a request may be changed or terminated by furnishing to the
person making the payments a written statement of change or
termination which shall take effect in the same manner as provided
in subparagraph (C). At the election of the payor, any such request
(or statement of change or revocation) may take effect earlier than
as provided in subparagraph (C).
(5) Special rule for sick pay paid pursuant to certain
collective-bargaining agreements
In the case of any sick pay paid pursuant to a collective-
bargaining agreement between employee representatives and one or
more employers which contains a provision specifying that this
paragraph is to apply to sick pay paid pursuant to such agreement
and contains a provision for determining the amount to be deducted
and withheld from each payment of such sick pay--
(A) the requirement of paragraph (1)(C) that a request for
withholding be in effect shall not apply, and
(B) except as provided in subsection (n), the amounts to be
deducted and withheld under this chapter shall be determined in
accordance with such agreement.
The preceding sentence shall not apply with respect to sick pay paid
pursuant to any agreement to any individual unless the social
security number of such individual is furnished to the payor and the
payor is furnished with such information as is necessary to
determine whether the payment is pursuant to the agreement and to
determine the amount to be deducted and withheld.
(6) Coordination with withholding on designated
distributions under section 3405
This subsection shall not apply to any amount which is a
designated distribution (within the meaning of section 3405(e)(1)).
(p) Voluntary withholding agreements
(1) Certain Federal payments
(A) In general
If, at the time a specified Federal payment is made to any
person, a request by such person is in effect that such payment
be subject to withholding under this chapter, then for purposes
of this chapter and so much of subtitle F as relates to this
chapter, such payment shall be treated as if it were a payment
of wages by an employer to an employee.
(B) Amount withheld
The amount to be deducted and withheld under this chapter
from any payment to which any request under subparagraph (A)
applies shall be an amount equal to the percentage of such
payment specified in such request. Such a request shall apply to
any payment only if the percentage specified is 7 percent, any
percentage applicable to any of the 3 lowest income brackets in
the table under section 1(c), or such other percentage as is
permitted under regulations prescribed by the Secretary.
(C) Specified Federal payments
For purposes of this paragraph, the term ``specified Federal
payment'' means--
(i) any payment of a social security benefit (as defined
in section 86(d)),
(ii) any payment referred to in the second sentence of
section 451(d) which is treated as insurance proceeds,
(iii) any amount which is includible in gross income
under section 77(a), and
(iv) any other payment made pursuant to Federal law
which is specified by the Secretary for purposes of this
paragraph.
(D) Requests for withholding
Rules similar to the rules that apply to annuities under
subsection (o)(4) shall apply to requests under this paragraph
and paragraph (2).
(2) Voluntary withholding on unemployment benefits
If, at the time a payment of unemployment compensation (as
defined in section 85(b)) is made to any person, a request by such
person is in effect that such payment be subject to withholding
under this chapter, then for purposes of this chapter and so much of
subtitle F as relates to this chapter, such payment shall be treated
as if it were a payment of wages by an employer to an employee. The
amount to be deducted and withheld under this chapter from any
payment to which any request under this paragraph applies shall be
an amount equal to 10 percent of such payment.
(3) Authority for other voluntary withholding
The Secretary is authorized by regulations to provide for
withholding--
(A) from remuneration for services performed by an employee
for the employee's employer which (without regard to this
paragraph) does not constitute wages, and
(B) from any other type of payment with respect to which the
Secretary finds that withholding would be appropriate under the
provisions of this chapter,
if the employer and employee, or the person making and the person
receiving such other type of payment, agree to such withholding.
Such agreement shall be in such form and manner as the Secretary may
by regulations prescribe. For purposes of this chapter (and so much
of subtitle F as relates to this chapter), remuneration or other
payments with respect to which such agreement is made shall be
treated as if they were wages paid by an employer to an employee to
the extent that such remuneration is paid or other payments are made
during the period for which the agreement is in effect.
(q) Extension of withholding to certain gambling winnings
(1) General rule
Every person, including the Government of the United States, a
State, or a political subdivision thereof, or any instrumentalities
of the foregoing, making any payment of winnings which are subject
to withholding shall deduct and withhold from such payment a tax in
an amount equal to the product of the third lowest rate of tax
applicable under section 1(c) and such payment.
(2) Exemption where tax otherwise withheld
In the case of any payment of winnings which are subject to
withholding made to a nonresident alien individual or a foreign
corporation, the tax imposed under paragraph (1) shall not apply to
any such payment subject to tax under section 1441(a) (relating to
withholding on nonresident aliens) or tax under section 1442(a)
(relating to withholding on foreign corporations).
(3) Winnings which are subject to withholding
For purposes of this subsection, the term ``winnings which are
subject to withholding'' means proceeds from a wager determined in
accordance with the following:
(A) In general
Except as provided in subparagraphs (B) and (C), proceeds of
more than $5,000 from a wagering transaction, if the amount of
such proceeds is at least 300 times as large as the amount
wagered.
(B) State-conducted lotteries
Proceeds of more than $5,000 from a wager placed in a
lottery conducted by an agency of a State acting under authority
of State law, but only if such wager is placed with the State
agency conducting such lottery, or with its authorized employees
or agents.
(C) Sweepstakes, wagering pools, certain parimutuel pools, jai
alai, and lotteries
Proceeds of more than $5,000 from--
(i) a wager placed in a sweepstakes, wagering pool, or
lottery (other than a wager described in subparagraph (B)),
or
(ii) a wagering transaction in a parimutuel pool with
respect to horse races, dog races, or jai alai if the amount
of such proceeds is at least 300 times as large as the
amount wagered.
(4) Rules for determining proceeds from a wager
For purposes of this subsection--
(A) proceeds from a wager shall be determined by reducing
the amount received by the amount of the wager, and
(B) proceeds which are not money shall be taken into account
at their fair market value.
(5) Exception for bingo, keno, and slot machines
The tax imposed under paragraph (1) shall not apply to winnings
from a slot machine, keno, and bingo.
(6) Statement by recipient
Every person who is to receive a payment of winnings which are
subject to withholding shall furnish the person making such payment
a statement, made under the penalties of perjury, containing the
name, address, and taxpayer identification number of the person
receiving the payment and of each person entitled to any portion of
such payment.
(7) Coordination with other sections
For purposes of sections 3403 and 3404 and for purposes of so
much of subtitle F (except section 7205) as relates to this chapter,
payments to any person of winnings which are subject to withholding
shall be treated as if they were wages paid by an employer to an
employee.
(r) Extension of withholding to certain taxable payments of Indian
casino profits
(1) In general
Every person, including an Indian tribe, making a payment to a
member of an Indian tribe from the net revenues of any class II or
class III gaming activity conducted or licensed by such tribe shall
deduct and withhold from such payment a tax in an amount equal to
such payment's proportionate share of the annualized tax.
(2) Exception
The tax imposed by paragraph (1) shall not apply to any payment
to the extent that the payment, when annualized, does not exceed an
amount equal to the sum of--
(A) the basic standard deduction (as defined in section
63(c)) for an individual to whom section 63(c)(2)(C) applies,
and
(B) the exemption amount (as defined in section 151(d)).
(3) Annualized tax
For purposes of paragraph (1), the term ``annualized tax''
means, with respect to any payment, the amount of tax which would be
imposed by section 1(c) (determined without regard to any rate of
tax in excess of the fourth lowest rate of tax applicable under
section 1(c)) on an amount of taxable income equal to the excess
of--
(A) the annualized amount of such payment, over
(B) the amount determined under paragraph (2).
(4) Classes of gaming activities, etc.
For purposes of this subsection, terms used in paragraph (1)
which are defined in section 4 of the Indian Gaming Regulatory Act
(25 U.S.C. 2701 et seq.), as in effect on the date of the enactment
of this subsection, shall have the respective meanings given such
terms by such section.
(5) Annualization
Payments shall be placed on an annualized basis under
regulations prescribed by the Secretary.
(6) Alternate withholding procedures
At the election of an Indian tribe, the tax imposed by this
subsection on any payment made by such tribe shall be determined in
accordance with such tables or computational procedures as may be
specified in regulations prescribed by the Secretary (in lieu of in
accordance with paragraphs (2) and (3)).
(7) Coordination with other sections
For purposes of this chapter and so much of subtitle F as
relates to this chapter, payments to any person which are subject to
withholding under this subsection shall be treated as if they were
wages paid by an employer to an employee.
(s) Exemption from withholding for any vehicle fringe benefit
(1) Employer election not to withhold
The employer may elect not to deduct and withhold any tax under
this chapter with respect to any vehicle fringe benefit provided to
any employee if such employee is notified by the employer of such
election (at such time and in such manner as the Secretary shall by
regulations prescribe). The preceding sentence shall not apply to
any vehicle fringe benefit unless the amount of such benefit is
included by the employer on a statement timely furnished under
section 6051.
(2) Employer must furnish W-2
Any vehicle fringe benefit shall be treated as wages from which
amounts are required to be deducted and withheld under this chapter
for purposes of section 6051.
(3) Vehicle fringe benefit
For purposes of this subsection, the term ``vehicle fringe
benefit'' means any fringe benefit--
(A) which constitutes wages (as defined in section 3401),
and
(B) which consists of providing a highway motor vehicle for
the use of the employee.
(Aug. 16, 1954, ch. 736, 68A Stat. 457; Aug. 9, 1955, ch. 666, Sec. 2,
69 Stat. 605; Pub. L. 87-256, Sec. 110(g)(2), Sept. 21, 1961, 75 Stat.
537; Pub. L. 88-272, title III, Sec. 302(a), (b), Feb. 26, 1964, 78
Stat. 140; Pub. L. 89-97, title III, Sec. 313(d)(3)-(5), July 30, 1965,
79 Stat. 384; Pub. L. 89-212, Sec. 2(c), Sept. 29, 1965, 79 Stat. 859;
Pub. L. 89-368, title I, Sec. 101(a)-(e)(3), Mar. 15, 1966, 80 Stat. 38-
61; Pub. L. 90-364, title I, Sec. 102(c), June 28, 1968, 82 Stat. 256;
Pub. L. 91-36, Sec. 2(a), June 30, 1969, 83 Stat. 42; Pub. L. 91-53,
Sec. 6(a), Aug. 7, 1969, 83 Stat. 96; Pub. L. 91-172, title VIII,
Sec. 805(a)-(e), (f)(1), (g), Dec. 30, 1969, 83 Stat. 686, 704-708; Pub.
L. 92-178, title II, Sec. 208(a), (b)(1), (c)-(h)(1), Dec. 10, 1971, 85
Stat. 512-517; Pub. L. 94-12, title II, Secs. 202(b), 205, Mar. 29,
1975, 89 Stat. 29, 32; Pub. L. 94-164, Secs. 2(b)(2), 5(a)(1), Dec. 23,
1975, 89 Stat. 971, 975; Pub. L. 94-331, Sec. 3(a)(1), June 30, 1976, 90
Stat. 782; Pub. L. 94-396, Sec. 2(a)(1), Sept. 3, 1976, 90 Stat. 1201;
Pub. L. 94-414, Sec. 3(a)(1), Sept. 17, 1976, 90 Stat. 1273; Pub. L. 94-
455, title IV, Sec. 401(d), title V, Secs. 502(b), 504(c)(3), title XII,
Sec. 1207(d), title XIX, Secs. 1903(a)(17), 1906(b)(13)(A), Oct. 4,
1976, 90 Stat. 1557, 1559, 1566, 1705, 1810, 1834; Pub. L. 95-30, title
I, Sec. 105, title IV, Sec. 405(a), May 23, 1977, 91 Stat. 140, 156;
Pub. L. 95-600, title I, Secs. 101(e), 102(c), title VI, Sec. 601(b)(2),
Nov. 6, 1978, 92 Stat. 2770, 2771, 2896; Pub. L. 96-601, Sec. 4(a)-(d),
Dec. 24, 1980, 94 Stat. 3496, 3497; Pub. L. 97-34, title I, Sec. 101(e),
Aug. 13, 1981, 95 Stat. 184; Pub. L. 97-248, title III, Secs. 317(a),
334(d), Sept. 3, 1982, 96 Stat. 607, 627; Pub. L. 98-67, title I,
Sec. 104(d)(3), Aug. 5, 1983, 97 Stat. 380; Pub. L. 99-44, Sec. 3, May
24, 1985, 99 Stat. 77; Pub. L. 99-514, title I, Sec. 104(b)(15), title
XIII, Secs. 1301(j)(8), 1303(b)(4), title XV, Sec. 1581(b), Oct. 22,
1986, 100 Stat. 2106, 2658, 2766; Pub. L. 100-203, title X,
Sec. 10302(a), Dec. 22, 1987, 101 Stat. 1330-429; Pub. L. 100-647, title
I, Sec. 1003(a)(2), Nov. 10, 1988, 102 Stat. 3382; Pub. L. 101-508,
title XI, Sec. 11801(a)(41), Nov. 5, 1990, 104 Stat. 1388-521; Pub. L.
102-318, title V, Sec. 522(b)(2)(D), July 3, 1992, 106 Stat. 314; Pub.
L. 102-486, title XIX, Secs. 1934(a), 1942(a), Oct. 24, 1992, 106 Stat.
3031, 3036; Pub. L. 103-465, title VII, Secs. 701(a), 702(a), Dec. 8,
1994, 108 Stat. 4995, 4996; Pub. L. 107-16, title I, Sec. 101(c)(6)-(9),
June 7, 2001, 115 Stat. 43, 44.)
Amendment of Section
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
References in Text
The date of the enactment of this subsection, referred to in subsec.
(l)(1), is the date of enactment of Pub. L. 89-368, which was approved
Mar. 15, 1966.
Section 4 of the Indian Gaming Regulatory Act, referred to in
subsec. (r)(4), is classified to section 2703 of Title 25, Indians.
The date of the enactment of this subsection, referred to in subsec.
(r)(4), is the date of enactment of Pub. L. 103-465, which was approved
Dec. 8, 1994.
Amendments
2001--Subsec. (p)(1)(B). Pub. L. 107-16, Secs. 101(c)(6), 901,
temporarily substituted ``7 percent, any percentage applicable to any of
the 3 lowest income brackets in the table under section 1(c),'' for ``7,
15, 28, or 31 percent''. See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (p)(2). Pub. L. 107-16, Secs. 101(c)(7), 901, temporarily
substituted ``10 percent'' for ``15 percent''. See Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (q)(1). Pub. L. 107-16, Secs. 101(c)(8), 901, temporarily
substituted ``equal to the product of the third lowest rate of tax
applicable under section 1(c) and such payment'' for ``equal to 28
percent of such payment''. See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (r)(3). Pub. L. 107-16, Secs. 101(c)(9), 901, temporarily
substituted ``the fourth lowest rate of tax applicable under section
1(c)'' for ``31 percent'' in introductory provisions. See Effective and
Termination Dates of 2001 Amendment note below.
1994--Subsec. (p). Pub. L. 103-465, Sec. 702(a), reenacted heading
without change and amended text of subsec. (p) generally. Prior to
amendment, text read as follows: ``The Secretary is authorized by
regulations to provide for withholding--
``(1) from remuneration for services performed by an employee
for his employer which (without regard to this subsection) does not
constitute wages, and
``(2) from any other type of payment with respect to which the
Secretary finds that withholding would be appropriate under the
provisions of this chapter,
if the employer and the employee, or in the case of any other type of
payment the person making and the person receiving the payment, agree to
such withholding. Such agreement shall be made in such form and manner
as the Secretary may by regulations provide. For purposes of this
chapter (and so much of subtitle F as relates to this chapter)
remuneration or other payments with respect to which such agreement is
made shall be treated as if they were wages paid by an employer to an
employee to the extent that such remuneration is paid or other payments
are made during the period for which the agreement is in effect.''
Subsec. (r). Pub. L. 103-465, Sec. 701(a), added subsec. (r).
1992--Subsec. (o)(6). Pub. L. 102-318 substituted ``3405(e)(1)'' for
``3405(d)(1)''.
Subsec. (q)(1). Pub. L. 102-486, Sec. 1934(a), substituted ``28
percent'' for ``20 percent''.
Subsec. (q)(3)(A), (C). Pub. L. 102-486, Sec. 1942(a), substituted
``$5,000'' for ``$1,000''.
1990--Subsec. (a)(3). Pub. L. 101-508 struck out par. (3) which read
as follows: ``Notwithstanding the provisions of this subsection, the
Secretary shall modify the tables and procedures under paragraph (1) to
reflect--
``(A) the amendments made by section 101(b) of the Economic
Recovery Tax Act of 1981, and such modification shall take effect on
October 1, 1981, as if such amendments made a 5-percent reduction
effective on such date, and
``(B) the amendments made by section 101(a) of such Act, and
such modifications shall take effect--
``(i) on July 1, 1982, as if the reductions in the rate of
tax under section 1 (as amended by such section) were
attributable to a 10-percent reduction effective on such date,
and
``(ii) on July 1, 1983, as if such reductions were
attributable to a 10-percent reduction effective on such date.''
1988--Subsec. (m)(1). Pub. L. 100-647 substituted ``section 62(a)
(other than paragraph (10) thereof))'' for ``section 62) (other than
paragraph (13) thereof)''.
1987--Subsec. (f)(3)(B). Pub. L. 100-203 amended subpar. (B)
generally. Prior to amendment, subpar. (B) read as follows: ``A
withholding exemption certificate furnished the employer in cases in
which a previous such certificate is in effect shall take effect with
respect to the first payment of wages made on or after the first status
determination date which occurs at least 30 days from the date on which
such certificate is so furnished, except that at the election of the
employer such certificate may be made effective with respect to any
payment of wages made on or after the date on which such certificate is
so furnished; but a certificate furnished pursuant to paragraph (2)(C)
shall not take effect, and may not be made effective, with respect to
any payment of wages made in the calendar year in which the certificate
is furnished. For purposes of this subparagraph the term `status
determination date' means January 1, May 1, July 1, and October 1 of
each year.''
1986--Subsec. (f)(1). Pub. L. 99-514, Sec. 104(b)(15)(F),
substituted ``standard deduction'' for ``zero bracket'' and
``subparagraph (E)'' for ``subparagraph (G)'' in last sentence.
Subsec. (f)(1)(A). Pub. L. 99-514, Sec. 104(b)(15)(B), inserted
``unless he is an individual described in section 151(d)(2)'' after
``himself''.
Subsec. (f)(1)(B). Pub. L. 99-514, Sec. 104(b)(15)(A), redesignated
subpar. (D) as (B) and struck out former subpar. (B) which read as
follows: ``one additional exemption for himself if, on the basis of
facts existing at the beginning of such day, there may reasonably be
expected to be allowable an exemption under section 151(c)(1) (relating
to old age) for the taxable year under subtitle A in respect of which
amounts deducted and withheld under this chapter in the calendar year in
which such day falls are allowed as a credit;''.
Pub. L. 99-514, Sec. 104(b)(15)(C), which directed that
``subparagraph (A) or (D)'' be substituted for ``subparagraph (A), (B),
(C), or (F)'' was executed by making the substitution for ``subparagraph
(A), (B), or (C)'', as the probable intent of Congress.
Subsec. (f)(1)(C). Pub. L. 99-514, Sec. 104(b)(15)(A), (D),
redesignated subpar. (E) as (C), substituted ``section 151(c)'' for
``section 151(e)'', and struck out former subpar. (C) which read as
follows: ``one additional exemption for himself if, on the basis of
facts existing at the beginning of such day, there may reasonably be
expected to be allowable an exemption under section 151(d)(1) (relating
to the blind) for the taxable year under subtitle A in respect of which
amounts deducted and withheld under this chapter in the calendar year in
which such day falls are allowed as a credit;''.
Subsec. (f)(1)(D). Pub. L. 99-514, Sec. 104(b)(15)(A), redesignated
subpar. (F) as (D). Former subpar. (D) redesignated (B).
Subsec. (f)(1)(E). Pub. L. 99-514, Sec. 104(b)(15)(A), (E),
redesignated subpar. (G) as (E) and substituted ``standard deduction''
for ``zero bracket''. Former subpar. (E) redesignated (C).
Pub. L. 99-514, Sec. 1301(j)(8), substituted ``section 7703'' for
``section 143''.
Subsec. (f)(1)(F), (G). Pub. L. 99-514, Sec. 104(b)(15)(A),
redesignated subpars. (F) and (G) as (D) and (E), respectively.
Subsec. (i)(1). Pub. L. 99-514, Sec. 1581(b), struck out ``or
decreases'' after ``increases''.
Subsec. (m)(3). Pub. L. 99-514, Sec. 104(b)(15)(G), inserted
``(including the additional standard deduction under section 63(c)(3)
for the aged and blind)''.
Subsec. (r). Pub. L. 99-514, Sec. 1303(b)(4), struck out subsec. (r)
which provided for extension of withholding to GSOC distributions.
1985--Subsec. (s). Pub. L. 99-44 added subsec. (s).
1983--Subsec. (s). Pub. L. 98-67 struck out subsec. (s) which
related to extension of withholding to certain payments where
identifying number was not furnished or was inaccurate. See section 3406
of this title.
1982--Subsec. (o)(6). Pub. L. 97-248, Sec. 334(d), added par. (6).
Subsec. (s). Pub. L. 97-248, Sec. 317(a), added subsec. (s).
1981--Subsec. (a). Pub. L. 97-34, Sec. 101(e)(1), revised subsec.
(a) generally to provide for a 5-percent reduction in income tax
withholding rates on Oct. 1, 1981, a further 10-percent reduction on
July 1, 1982, and a final 10-percent reduction on July 1, 1983.
Subsec. (b)(1). Pub. L. 97-34, Sec. 101(e)(2)(A), redesignated par.
(2) as (1). Former par. (1), which set out a table for determining
amount of one withholding exemption for each of the various payroll
periods, was struck out.
Subsec. (b)(2). Pub. L. 97-34, Sec. 101(e)(2)(A), redesignated par.
(3) as (2). Former par. (2) redesignated (1).
Subsec. (b)(3). Pub. L. 97-34, Sec. 101(e)(2)(A), (B), redesignated
par. (4) as (3) and substituted provisions relating to an employer's
computation of the tax to be deducted and withheld as if the aggregate
of the wages paid to the employee during the calendar week were paid for
a weekly payroll period, for provisions relating to an employer's
computation of the tax to be deducted and withheld using the excess of
the aggregate of the wages paid to the employee during the calendar week
over the withholding exemption allowed by this subsection for a weekly
payroll period. Former par. (3) redesignated (2).
Subsec. (b)(4), (5). Pub. L. 97-34, Sec. 101(e)(2)(A), redesignated
par. (5) as (4). Former par. (4) redesignated (3).
Subsec. (f)(1)(G). Pub. L. 97-34, Sec. 101(e)(3), inserted ``(or
more than one exemption if so prescribed by the Secretary)'' after ``an
amount equal to one exemption''.
Subsec. (i). Pub. L. 97-34, Sec. 101(e)(4), substituted provisions
authorizing the Secretary by regulations to provide for increases or
decreases in the amount of withholding otherwise required under this
section in cases where the employee requests the changes, for provisions
under which the Secretary was authorized to provide withholding in
addition to that otherwise required under this section in cases in which
the employer and the employee agreed to such additional withholding.
Subsec. (m). Pub. L. 97-34, Sec. 101(e)(5), revised provisions
respecting additional withholding allowances for anticipated excess
itemized deductions and tax credits claimed in accordance with Treasury
regulations and Treasury statutory authority to provide additional
withholding allowances for any additional items specified in Treasury
regulations.
1980--Subsec. (o)(1)(C). Pub. L. 96-601, Sec. 4(a), added subpar.
(C).
Subsec. (o)(2)(B). Pub. L. 96-601, Sec. 4(d), struck out ``, but
only to the extent that the amount is includible in the gross income of
such individual'' after ``pension or annuity''.
Subsec. (o)(2)(C). Pub. L. 96-601, Sec. 4(c), added subpar. (C).
Subsec. (o)(3). Pub. L. 96-601, Sec. 4(b), substituted provision
authorizing amount to be withheld from annuity payments or sick pay for
provision relating to request for withholding. See subsec. (o)(4) of
this section.
Subsec. (o)(4), (5). Pub. L. 96-601, Sec. 4(b), added pars. (4) and
(5).
1978--Subsec. (a). Pub. L. 95-600, Sec. 101(e)(1), substituted
``With respect to wages paid after December 31, 1978, the tables so
prescribed shall be the same as the tables prescribed under this
subsection which were in effect on January 1, 1975, except that such
tables shall be modified to the extent necessary to reflect the
amendments made by sections 101 and 102 of the Tax Reduction and
Simplification Act of 1977 and the amendments made by section 101 of the
Revenue Act of 1978.'' for ``With respect to wages paid after May 31,
1977, and before January 1, 1979, the tables so prescribed shall be the
same as the tables prescribed under this subsection which were in effect
on January 1, 1976; except that such tables shall be modified to the
extent necessary so that, had they been in effect for all of 1977, they
would reflect the full year effect of the amendments made by sections
101 and 102 of the Tax Reduction and Simplification Act of 1977. With
respect to wages paid after December 31, 1978, the tables so prescribed
shall be the same as the tables prescribed under this subsection which
were in effect on January 1, 1975, except that such tables shall be
modified to the extent necessary to reflect the amendments made by
sections 101 and 102 of the Tax Reduction and Simplification Act of
1977.''.
Subsec. (b)(1). Pub. L. 95-600, Sec. 102(c)(1), increased the
amounts set out in the table for one withholding exemption for each of
the payroll period categories from $14.40, $28.80, $31.30, $62.50,
$187.50, $375.00, $750.00 and $2.10 to $19.23, $38.46, $41.66, $83.33,
$250.00, $500.00, $1,000.00 and $2.74, respectively.
Subsec. (m)(1). Pub. L. 95-600, Secs. 101(e)(2), 102(c)(2),
substituted ``$1,000'' for ``$750'', ``$3,400'' for ``$3,200'' and
``$2,300'' for ``$2,200''.
Subsec. (r). Pub. L. 95-600, Sec. 601(b)(2), added subsec. (r).
1977--Subsec. (a). Pub. L. 95-30, Sec. 105(a), substituted ``With
respect to wages paid after May 31, 1977, and before January 1, 1979,
the tables so prescribed shall be the same as the tables prescribed
under this subsection which were in effect on January 1, 1976; except
that such tables shall be modified to the extent necessary so that, had
they been in effect for all of 1977, they would reflect the full year
effect of the amendments made by sections 101 and 102 of the Tax
Reduction and Simplification Act of 1977. With respect to wages paid
after December 31, 1978, the tables so prescribed shall be the same as
the tables prescribed under this subsection which were in effect on
January 1, 1975, except that such tables shall be modified to the extent
necessary to reflect the amendments made by sections 101 and 102 of the
Tax Reduction and Simplification Act of 1977'' for ``With respect to
wages paid prior to January 1, 1978, the tables so prescribed shall be
the same as the tables prescribed under this section which were in
effect on January 1, 1976. With respect to wages paid after December 31,
1977, the Secretary shall prescribe new tables which shall be the same
as the tables prescribed under this subsection which were in effect on
January 1, 1975, except that such tables shall be modified to the extent
necessary to reflect the amendments made to subsections (b) and (c) of
section 141 by the Tax Reform Act of 1976''.
Subsec. (f)(1). Pub. L. 95-30, Sec. 105(b)(1), substituted ``zero
bracket'' for ``standard deduction'' in subpar. (G) and in provisions
following subpar. (G).
Subsec. (m)(1)(B). Pub. L. 95-30, Sec. 105(b)(2), substituted ``an
amount equal to $3,200 ($2,200'' for ``an amount equal to the lesser of
(i) 16 percent of his estimated wages, or (ii) $2,800 ($2,400''.
Subsec. (m)(2)(A). Pub. L. 95-30, Sec. 105(b)(3)(A), (B),
substituted ``section 151'' for ``sections 141 and 151'' and ``(or the
zero bracket amount (within the meaning of section 63(d)))'' for ``(or
the amount of the standard deduction)''.
Subsec. (m)(2)(C). Pub. L. 95-30, Sec. 105(b)(3)(C), substituted
``(or the zero bracket amount)'' for ``(or the standard deduction)''.
Subsec. (q)(3)(C). Pub. L. 95-30, Sec. 405(a), inserted reference to
certain parimutuel pools and jai alai in heading and, in text,
designated existing provisions as cl. (i) and added cl. (ii).
1976--Subsec. (a). Pub. L. 94-455, Secs. 401(d)(1), 1906 (b)(13)(A),
struck out ``or his delegate'' after ``Secretary'', inserted ``With
respect to wages paid prior to January 1, 1978'' after ``by the
Secretary'', as amended, and substituted ``prescribed under this section
which were'' for ``contained in this subsection as'' after ``same as the
tables'', ``1976'' for ``1975'' after ``January 1'', and ``With respect
to wages paid after December 31, 1977, the Secretary shall prescribe new
tables which shall be the same as the tables prescribed under this
subsection which were in effect on January 1, 1975, except that such
tables shall be modified to the extent necessary to reflect the
amendments made to subsections (b) and (c) of section 141 by the Tax
Reform Act of 1976'' for ``except that the amounts set forth as amounts
of income tax to be withheld with respect to wages paid after April 30,
1975, and before January 1, 1976, shall reflect the full calendar year
effect for 1975 of the amendments made by sections 201, 202, 203, and
204 of the Tax Reduction Act of 1975'' after ``effect on January 1,
1976'', as amended.
Pub. L. 94-414 substituted ``October 1, 1976'' for ``September 15,
1976''.
Pub. L. 94-396 substituted ``September 15, 1976'' for ``September 1,
1976''.
Pub. L. 94-331 substituted ``September 1, 1976'' for ``July 1,
1976''.
Subsec. (c)(4). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ``or
his delegate'' after ``Secretary''.
Subsec. (c)(6). Pub. L. 94-455, Secs. 401(d)(2), 1906(b)(13)(A),
substituted ``the table for an annual payroll period prescribed pursuant
to subsection (a)'' for ``table 7 contained in subsection (a)'' after
``basis of the'', as subsec. (c)(6) was in effect on the day before the
date of enactment of the Tax Reduction Act of 1975, Pub. L. 94-12, which
was approved on Mar. 29, 1975, and struck out ``or his delegate'' after
``Secretary''.
Subsecs. (f), (h), (i), (j). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ``or his delegate'' after ``Secretary''.
Subsec. (l). Pub. L. 94-455, Sec. 1903(a)(17), substituted ``section
2(a)'' for ``section 2(b)'' after ``as defined in''.
Subsec. (m)(1)(B). Pub. L. 94-455, Sec. 401(d)(3), reenacted subpar.
(B) without change.
Subsec. (m)(2)(A). Pub. L. 94-455, Sec. 502(b), inserted ``(other
than paragraph (13) thereof)'' after ``under section 62''.
Subsec. (m)(2)(D), (3)(B). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ``or his delegate'' after ``Secretary''.
Subsec. (m)(4). Pub. L. 94-455, Sec. 504(c)(3), added subpar. (C).
Sec. 1906(b)(13)(A) struck out ``or his delegate'' after ``Secretary''.
Subsecs. (n), (p). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out
``or his delegate'' after ``Secretary'' wherever appearing.
Subsec. (q). Pub. L. 94-455, Sec. 1207(d), added subsec. (q).
1975--Subsec. (a). Pub. L. 94-164, Sec. 5(a)(1), inserted provision
that the tables prescribed with respect to wages paid after Dec. 31,
1975, and before July 1, 1976, shall be the same as the tables
prescribed under this subsection which were in effect on Dec. 10, 1975.
Pub. L. 94-12, Sec. 205(a), substituted provisions directing the
Secretary to prescribe new withholding tables setting changed
withholding rates for wages paid during the period May 1, 1975, to Dec.
31, 1975, so as to reflect the full calendar year effect for 1975 of the
amendments to the minimum standard deduction, the percentage standard
deduction, the earned income credit, and the additional tax credit by
sections 201, 202, 203, and 204 of the Tax Reduction Act of 1975, Pub.
L. 94-12, for provisions setting out 8 tables to be followed by
employers in withholding taxes on wages paid.
Subsec. (c)(6). Pub. L. 94-12, Sec. 205(b), substituted ``the table
for an annual payroll period prescribed pursuant to subsection (a)'' for
``table 7 contained in subsection (a)''. See 1976 Amendment note set out
above.
Subsec. (m)(1)(B). Pub. L. 94-164, Sec. 2(b)(2), substituted
``$2,800'' and ``$2,400'' for ``$2,600'' and ``$2,300'' respectively in
cl. (ii).
Pub. L. 94-12, Sec. 202(b), substituted ``the lesser of (i) 16
percent of his estimated wages, or (ii) $2,600 ($2,300 in the case of an
individual who is not married (within the meaning of section 143) and
who is not a surviving spouse (as defined in section 2(a)))'' for ``the
lesser of (i) $2,000 or (ii) 15 percent of his estimated wages''.
1971--Subsec. (a). Pub. L. 92-178, Sec. 208(a), substituted new sets
of tables 1 to 8 applicable (under Sec. 208(i)(1)) with respect to wages
paid after Jan. 15, 1972, for the tables applicable in the case of wages
paid as provided in former: par. (1) after Dec. 31, 1969, and before
July 1, 1970; par. (2) after June 30, 1970, and before Jan. 1, 1971;
par. (3) after Dec. 31, 1970, and before Jan. 1, 1972; par. (4) after
Dec. 31, 1971, and before Jan. 1, 1973; and par. (5) after Dec. 31,
1972. Pub. L. 92-178, Sec. 208(h)(1), made provisions of par. (3)
applicable (under section 208(i)(2)) with respect to wages paid after
Dec. 31, 1971, and before Jan. 16, 1972.
Subsec. (b)(1). Pub. L. 92-178, Sec. 208(b)(1), revised withholding
rates upwards, substituting 14.40; 28.80; 31.30; 62.50; 187.50; 375.00;
750.00; and 2.10 for 12.50; 25.00 27.10; 54.20; 162.50; 325.00; 650.00;
and 1.80, respectively, to be effective with respect to wages paid after
Jan. 15, 1972. Pub. L. 92-178, Sec. 208(h)(2), in amending Pub. L. 91-
172, Sec. 805(b)(1), extended application of such former withholding
rates to wages paid after June 30, 1970, and before Jan. 16, 1972,
previously applicable to wages paid before Jan. 1, 1972.
Subsec. (c)(6). Pub. L. 92-178, Sec. 208(g), substituted ``table 7
contained in subsection (a)'' for ``table 7 contained in paragraph (1),
(2), (3), (4), or (5) (whichever is applicable) of subsection (a)''.
Subsec. (f)(1)(G). Pub. L. 92-178, Sec. 208(c), added subpar. (G).
Subsec. (f)(7). Pub. L. 92-178, Sec. 208(d), added par. (7).
Subsec. (m)(1)(B). Pub. L. 92-178, Sec. 208(e), substituted ``an
amount equal to the lesser of (i) $2,000 or (ii) 15 percent of his
estimated wages'' for ``an amount equal to 15 percent of his estimated
wages''.
Subsec. (m)(2)(A). Pub. L. 92-178, Sec. 208(f)(1), inserted ``or (if
such a return has not been filed for such preceding taxable year at the
time the withholding exemption certificate is furnished the employer)
the second taxable year preceding the estimation year'' after ``for the
taxable year preceding the estimation year''.
Subsec. (m)(2)(D). Pub. L. 92-178, Sec. 208(f)(2), substituted as
definition of ``estimation year'' the calendar year in which the wages
are paid for prior provision defining term as meaning ``(i) with respect
to payments of wages after April 30 and on or before December 31 of any
calendar year, such calendar year, and (ii) with respect to payments of
wages on or after January 1 and before May 1 of any calendar year, the
preceding calendar year (except that with respect to an exemption
certificate furnished by an employee after he has filed his return for
the preceding calendar year, such term means the current calendar
year).''
Subsec. (m)(3)(B) to (E). Pub. L. 92-178, Sec. 208(f)(3), struck out
subpars. (B) and (C) providing that only one certificate be in effect
and for termination of effectiveness of certificate and redesignated
subpars. (D) and (E) as (B) and (C), respectively.
1969--Subsec. (a)(1). Pub. L. 91-172, Sec. 805(a), (b)(2),
substituted new sets of tables 1 to 8 for application to wages paid
after Dec. 31, 1969, and before July 1, 1970, and after June 30, 1970,
and before January 1, 1972, for the tables applicable to wages paid
before July 13, 1968, and after Dec. 31, 1969.
Pub. L. 91-53, Sec. 6(a)(1), substituted ``December 31, 1969'' for
``July 31, 1969''.
Pub. L. 91-36, Sec. 2(a)(1), substituted ``July 31, 1969'' for
``June 30, 1969''.
Subsec. (a)(2). Pub. L. 91-172, Sec. 805(a), substituted a set of
tables 1 to 8 for application to wages paid after June 30, 1970, and
before Jan. 1, 1971, for the tables applicable to wages paid after June
30, 1970, and before Jan. 1, 1970.
Pub. L. 91-53, Sec. 6(a)(2), substituted ``January 1, 1970'' for
``August 1, 1969''.
Pub. L. 91-36, Sec. 2(a)(2), substituted ``August 1, 1969'' for
``July 1, 1969''.
Subsec. (a)(3) to (5). Pub. L. 91-172, Sec. 805(a), added sets of
tables applicable, respectively, to wages paid after Dec. 31, 1970, and
before Jan. 1, 1972, after Dec. 31, 1971, and before Jan. 1, 1973, and
after Dec. 31, 1972.
Subsec. (b)(1). Pub. L. 91-172, Sec. 805(b)(1)-(4), revised
withholding rates effective with respect to wages paid after Dec. 31,
1969, and before July 1, 1970, for the period after June 30, 1970, and
before Jan. 1, 1972, during 1972, and after 1972.
Subsec. (c)(1). Pub. L. 91-172, Sec. 805(c)(1), substituted
provisions authorizing employer to deduct and withhold tax determinable
according to tables prescribed by the Secretary or his delegate for
provisions under which the employer was authorized to deduct and
withhold tax only according to tables set out.
Subsec. (c)(6). Pub. L. 91-172, Sec. 805(c)(2), substituted
provisions for determination of amount deductible according to tables
prescribed by the Secretary or his delegate and for computation of wages
and amounts of income tax after Dec. 31, 1969, for provisions for
determination of such wages and amounts of income tax after July 13,
1968, and before Jan. 1, 1970.
Pub. L. 91-53, Sec. 6(a)(3), substituted ``January 1, 1970'' for
``August 1, 1969''.
Pub. L. 91-36, Sec. 2(a)(3), substituted ``August 1, 1969'' for
``July 1, 1969''.
Subsec. (h). Pub. L. 91-172, Sec. 805(d), redesignated existing
pars. (1) to (3) as subpars. (A) to (C) of par. (1), and added pars. (2)
to (4).
Subsec. (m)(1). Pub. L. 91-172, Sec. 805(e)(2), substituted $750 for
$700 in the material preceding subpar. (A) and in subpar. (B)
substituted 15 per cent for 10 per cent of the first $7,500 and 17 per
cent of remainder of the estimated wages.
Subsec. (m)(2)(A). Pub. L. 91-172, Sec. 805(e)(2), inserted amount
of standard deduction as an alternative limit in cl. (i), and
substituted the determinable additional deductions for provisions
referring to an employee who did not show such deductions on his return.
Subsec. (m)(2)(B). Pub. L. 91-172, Sec. 805(e)(2), struck out limit
on aggregate amount.
Subsec. (m)(2)(C), (D). Pub. L. 91-172, Sec. 805(e)(1), (2), added
subpar. (C). Former subpar. (C) redesignated (D)
Subsec. (n). Pub. L. 91-172, Sec. 805(f)(1), added subsec. (n).
Subsecs. (o), (p). Pub. L. 91-172, Sec. 805(g), added subsecs. (o)
and (p).
1968--Subsec. (a). Pub. L. 90-364, Sec. 102(c)(1), designated
existing Tables 1 to 8 as constituting par. (1), inserted provisions
preceding existing Table 1-8 so as to limit their application to the
case of wages paid on or before the 15th day after the date of the
enactment of the Revenue and Expenditure Control Act of 1968 or after
June 30, 1969, and added par. (2).
Subsec. (c)(6). Pub. L. 90-364, Sec. 102(c)(2), added par. (6).
1966--Subsec. (a). Pub. L. 89-368, Sec. 101(a), struck out reference
to subsections (j) and (k) and substituted provisions establishing
separate tables for single persons and for married persons in each of
eight payroll period categories each containing six graduated
withholding rates ranging from 14 to 30 percent for provisions placing
the rate at a fixed 14 percent.
Subsec. (b)(1). Pub. L. 89-368, Sec. 101(b), increased amounts set
out for one withholding exemption for each of the payroll period
categories from ``$13.00'', $26.00'', ``$28.00'', ``$56.00'',
``$167.00'', ``$333.00'', ``$667.00'', and ``$1.80'' to ``$13.50'',
``$26.90'', ``$29.20'', ``$58.30'', ``$175.00'', ``$350.00'',
``$700.00'', and ``$1.90'' respectively.
Subsec. (c)(1). Pub. L. 89-368, Sec. 101(c), replaced existing
tables with separate tables for employees who are married and for
employees who are not married covering weekly, biweekly, semimonthly,
monthly, and daily or miscellaneous pay periods and reflecting increased
and graduated withholding rates.
Subsec. (f)(1)(F), (3)(B). Pub. L. 89-368, Sec. 101(e)(1), (3),
added par. (1)(F) and, in par. (3)(B), changed definition of ``status
determination date'' from January 1 and July 1 of each year to January
1, May 1, July 1, and October 1 of each year.
Subsec. (l). Pub. L. 89-368, Sec. 101(d), added subsec. (l).
Subsec. (m). Pub. L. 89-368, Sec. 101(e)(2), added subsec. (m).
1965--Subsec. (a). Pub. L. 89-97, Sec. 313(d)(3), substituted
``subsections (j) and (k)'' for ``subsection (j)''.
Subsec. (h)(3). Pub. L. 89-97, Sec. 313(d)(4), inserted ``(and, in
the case of tips referred to in subsection (k), within 30 days
thereafter)'' after ``quarter'' first place it appears.
Subsec. (k). Pub. L. 89-212 inserted ``or section 3202 (c)(2)'' and
``or section 3202(a)''.
Pub. L. 89-97, Sec. 313(d)(5), added subsec. (k).
1964--Subsec. (a). Pub. L. 88-272, Sec. 302(a), reduced tax from 18%
to 14%.
Subsec. (c)(1). Pub. L. 88-272, Sec. 302(b), substituted new tables
reflecting lowered withholding rates.
1961--Subsec. (f)(6). Pub. L. 87-256 added par. (6).
1955--Subsec. (a). Act Aug. 9, 1955, Sec. 2(a), inserted ``(except
as provided in subsection (j))'' after ``upon such wages''.
Subsec. (j). Act Aug. 9, 1955, Sec. 2(b), added subsec. (j).
Effective and Termination Dates of 2001 Amendment
Amendment by Pub. L. 107-16 applicable to amounts paid after the
60th day after June 7, 2001, and references to income brackets and rates
of tax in such amendment to be applied without regard to section
1(i)(1)(D) of this title, see section 101(d)(2) of Pub. L. 107-16, set
out as a note under section 1 of this title.
Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or
limitation years beginning after Dec. 31, 2010, and the Internal Revenue
Code of 1986 to be applied and administered to such years as if such
amendment had never been enacted, see section 901 of Pub. L. 107-16, set
out as a note under section 1 of this title.
Effective Date of 1994 Amendment
Section 701(b) of Pub. L. 103-465 provided that: ``The amendment
made by this section [amending this section] shall apply to payments
made after December 31, 1994.''
Amendment by section 702(a) of Pub. L. 103-465 applicable to
payments made after Dec. 31, 1996, see section 702(d) of Pub. L. 103-
465, set out as a note under section 3304 of this title.
Effective Date of 1992 Amendments
Section 1934(b) of Pub. L. 102-486 provided that: ``The amendment
made by this section [amending this section] applies to payments
received after December 31, 1992.''
Section 1942(b) of Pub. L. 102-486 provided that: ``The amendments
made by subsection (a) [amending this section] shall apply to payments
of winnings after December 31, 1992.''
Amendment by Pub. L. 102-318 applicable, except as otherwise
provided, to distributions after Dec. 31, 1992, see section 522(d) of
Pub. L. 102-318, set out as a note under section 401 of this title.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of 1986,
Pub. L. 99-514, to which such amendment relates, see section 1019(a) of
Pub. L. 100-647, set out as a note under section 1 of this title.
Effective Date of 1987 Amendment
Section 10302(b) of Pub. L. 100-203 provided that: ``The amendment
made by subsection (a) [amending this section] shall apply to
certificates furnished after the day 30 days after the date of the
enactment of this Act [Dec. 22, 1987].''
Effective Date of 1986 Amendment
Amendment by section 104(b)(15) of Pub. L. 99-514 applicable to
taxable years beginning after Dec. 31, 1986, see section 151(a) of Pub.
L. 99-514, set out as a note under section 1 of this title.
Amendment by section 1301(j)(8) of Pub. L. 99-514 applicable to
bonds issued after Aug. 15, 1986, except as otherwise provided, see
sections 1311 to 1318 of Pub. L. 99-514, set out as an Effective Date;
Transitional Rules note under section 141 of this title.
Amendment by section 1303(b)(4) of Pub. L. 99-514 effective Oct. 22,
1986, see section 1311(f) of Pub. L. 99-514, as amended, set out as an
Effective Date; Transitional Rules note under section 141 of this title.
Effective Date of 1985 Amendment
Section 6(d) of Pub. L. 99-44 provided that: ``The amendment made by
section 3 [amending this section] shall take effect on January 1,
1985.''
Effective Date of 1983 Amendment
Amendment by Pub. L. 98-67 applicable with respect to payments made
after Dec. 31, 1983, see section 110(a) of Pub. L. 98-67, set out as a
note under section 31 of this title.
Effective Date of 1982 Amendment
Section 317(b) of Pub. L. 97-248 provided: ``The amendments made by
subsection (a) [amending this section] shall apply to payments made
after December 31, 1983.''
Amendment by section 334(d) of Pub. L. 97-248 applicable to payments
or other distributions made after Dec. 31, 1982, see section 334(e) of
Pub. L. 97-248, set out as an Effective Date note under section 3405 of
this title.
Effective Date of 1981 Amendment
Section 101(f)(2) of Pub. L. 97-34 provided that: ``The amendments
made by subsection (e) [amending this section] shall apply to
remuneration paid after September 30, 1981; except that the amendment
made by subsection (e)(5) [amending this section] shall apply to
remuneration paid after December 31, 1981.''
Effective Date of 1980 Amendment
Section 4(f) of Pub. L. 96-601 provided that: ``The amendments made
by this section [amending this section and section 6051 of this title]
shall apply to payments made on or after the first day of the first
calendar month beginning more than 120 days after the date of the
enactment of this Act [Dec. 24, 1980].''
Effective Date of 1978 Amendment
Section 101(f)(2) of Pub. L. 95-600 provided that: ``The amendments
made by subsection (e) [amending this section] shall apply to
remuneration paid after December 31, 1978.''
Section 102(d)(2) of Pub. L. 95-600 provided that: ``The amendments
made by subsection (c) [amending this section] shall apply with respect
to remuneration paid after December 31, 1978.''
Amendment by section 601(b)(2) of Pub. L. 95-600 applicable with
respect to corporations chartered after Dec. 31, 1978, and before Jan.
1, 1984, see section 601(d) of Pub. L. 95-600, set out as a note under
section 172 of this title.
Effective Date of 1977 Amendment
Section 106(b) of Pub. L. 95-30 provided that: ``The amendments made
by section 105 [amending this section] shall apply to wages paid after
April 30, 1977.''
Section 405(b) of Pub. L. 95-30 provided that: ``The amendments made
by this section [amending this section] apply to payments made after
April 30, 1977.''
Effective Date of 1976 Amendment
Amendment by section 401(d) of Pub. L. 94-455 applicable to wages
paid after Sept. 14, 1976, see section 401(e) of Pub. L. 94-455, set out
as a note under section 32 of this title.
Section 1207(f)(3) of Pub. L. 94-455 provided that: ``The amendments
made by subsection (d) [amending this section] shall apply to payments
of winnings made after the 90th day after the date of the enactment of
this Act [Oct. 4, 1976].''
Effective and Termination Dates of 1975 Amendments
Amendment by section 2(b)(2) of Pub. L. 94-164 applicable to taxable
years ending after Dec. 31, 1975 and before Jan. 1, 1977, see section
2(g) of Pub. L. 94-164, set out as an Effective Date of 1975 Amendment
note under section 32 of this title.
Section 209(c) of Pub. L. 94-12, as amended by Pub. L. 94-164,
Sec. 5(a)(2); Pub. L. 94-331, Sec. 3(a)(2); Pub. L. 94-396, Sec. 2(b);
Pub. L. 94-414, Sec. 3(a)(2), provided that: ``The amendments made by
sections 202(b) and 205 [amending this section] shall apply to wages
paid after April 30, 1975, and before October 1, 1976.''
Effective Date of 1971 Amendment
Section 208(i) of Pub. L. 92-178 provided that:
``(1) The amendments made by this section [amending this
section] (other than subsection (h)) shall apply with respect to
wages paid after January 15, 1972.
``(2) The amendments made by subsection (h) [amending this
section] shall apply with respect to wages paid after December 31,
1971, and before January 16, 1972.''
Effective Date of 1969 Amendments
Section 805(h) of Pub. L. 91-172, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
``(1) The amendments made by subsections (a), (b), (c), (d), and (e)
[amending this section] shall apply with respect to remuneration paid
after December 31, 1969.
``(2) The amendment made by subsection (f) [amending this section
and section 6051 of this title] applies to wages paid after April 30,
1970.
``(3) Subsection (o) of section 3402 of the Internal Revenue Code of
1986 [formerly I.R.C. 1954], added by subsection (g) of this subsection,
shall apply to payments made after December 31, 1970. Subsection (p) of
such section 3402, added by subsection (g) of this section, shall apply
to payments made after June 30, 1970.''
Section 6(b) of Pub. L. 91-53 provided that: ``The amendments made
by this section [amending this section] shall apply with respect to
wages paid after July 31, 1969, and before January 1, 1970.''
Section 2(b) of Pub. L. 91-36 provided that: ``The amendments made
by subsection (a) [amending this section] shall apply with respect to
wages paid after June 30, 1969.''
Effective Date of 1966 Amendment
Section 101(e)(6) of Pub. L. 89-368 provided that: ``The amendments
made by paragraphs (1) and (2) of this subsection [amending this
section] shall apply only with respect to remuneration paid after
December 31, 1966, but only with respect to withholding exemptions based
on estimation years beginning after such date.''
Section 101(g) of Pub. L. 89-368 provided that: ``The amendments
made by this section (other than subsection (e) [amending this section])
shall apply only with respect to remuneration paid after April 30,
1966.''
Effective Date of 1965 Amendments
Amendment by Pub. L. 89-212 effective only with respect to tips
received after 1965, see section 6 of Pub. L. 89-212, set out as a note
under section 3201 of this title.
Amendment by Pub. L. 89-97 applicable only with respect to tips
received by employees after 1965, see section 313(f) of Pub. L. 89-97,
set out as an Effective Date note under section 6053 of this title.
Effective Date of 1964 Amendment
Section 302(d) of Pub. L. 88-272 provided that: ``The amendments
made by subsections (a) and (b) of this section [amending this section]
shall apply with respect to remuneration paid after the seventh day
following the date of the enactment of this Act [Feb. 26, 1964]. The
amendment made by subsection (c) of this section [amending section 1441
of this title] shall apply with respect to payments made after the
seventh day following the date of the enactment of this Act.''
Effective Date of 1961 Amendment
Amendment by Pub. L. 87-256 applicable with respect to wages paid
after Dec. 31, 1961, see section 110(h)(4) of Pub. L. 87-256, set out as
a note under section 3401 of this title.
Effective Date of 1955 Amendment
Section 3 of act Aug. 9, 1955, provided that: ``The amendment made
by section 2 [amending this section] shall be applicable only with
respect to remuneration paid after the date of enactment of this Act
[Aug. 9, 1955].''
Savings Provision
For provisions that nothing in amendment by Pub. L. 101-508 be
construed to affect treatment of certain transactions occurring,
property acquired, or items of income, loss, deduction, or credit taken
into account prior to Nov. 5, 1990, for purposes of determining
liability for tax for periods ending after Nov. 5, 1990, see section
11821(b) of Pub. L. 101-508, set out as a note under section 29 of this
title.
Plan Amendments Not Required Until January 1, 1994
For provisions directing that if any amendments made by subtitle B
[Secs. 521-523] of title V of Pub. L. 102-318 require an amendment to
any plan, such plan amendment shall not be required to be made before
the first plan year beginning on or after Jan. 1, 1994, see section 523
of Pub. L. 102-318, set out as a note under section 401 of this title.
Withholding Allowances To Reflect New Rate Schedules
Section 1581(a) of Pub. L. 99-514 provided that: ``The Secretary of
the Treasury or his delegate shall modify the withholding schedules and
withholding exemption certificates under section 3402 of the Internal
Revenue Code of 1954 [now 1986] to better approximate actual tax
liability under the amendments made by this Act [see Tables for
classification].''
Employer's Responsibility Upon Failure of Employee To File Revised
Withholding Allowance Certificate Before Oct. 1, 1987
Section 1581(c) of Pub. L. 99-514, as amended by Pub. L. 100-647,
title I, Sec. 1015(p), Nov. 10, 1988, 102 Stat. 3572, provided that:
``If an employee has not filed a revised withholding allowance
certificate before October 1, 1987, the employer shall withhold income
taxes from the employee's wages--
``(1) as if the employee claimed 1 withholding allowance, if the
employee checked the `single' box on the employee's previous
withholding allowance certificate, or
``(2) as if the employee claimed 2 withholding allowances, if
the employee checked the `married' box on the employee's previous
withholding allowance certificate.
The preceding sentence shall not apply if its application would result
in an increase in the number of withholding allowances for the
employee.''
Failure To Deduct and Withhold Under a Duty Created or Increased by Tax
Reform Act of 1976
Section 304 of Pub. L. 95-30, as amended by Pub. L. 99-514, Sec. 2,
Oct. 22, 1986, 100 Stat. 2095, provided that: ``No person shall be
liable in respect of any failure to deduct and withhold under section
3402 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]
(relating to income tax collected at source) on remuneration paid before
January 1, 1977, to the extent that the duty to deduct and withhold was
created or increased by any provision of the Tax Reform Act of 1976
[Pub. L. 94-455].''
Wages Paid During 1972 and After 1972
Section 805(b)(3), (4) of Pub. L. 91-172, title VIII, Dec. 30, 1969,
83 Stat. 704, which provided for section 3402(b)(1) withholding rates of
13.50; 26.90; 29.20; 58.30; 175.00; 350.00; 700.00; and 1.90, effective
with respect to wages during 1972, and withholding rates of 14.40;
28.80; 31.30; 62.50; 187.50; 375.00; 750.00; and 2.10, effective with
respect to wages paid after 1972, was repealed by section 208(b)(2) of
Pub. L. 92-178.
Transitional Determination Status Date
Section 101(f) of Pub. L. 89-368, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``Notwithstanding
section 3402(f)(3)(B) of the Internal Revenue Code of 1986 [formerly
I.R.C. 1954], a withholding exemption certificate furnished the employer
after the date of the enactment of this Act [Mar. 15, 1966] and before
May 1, 1966, shall take effect with respect to the first payment of
wages made on or after May 1, 1966, or the 10th day after the date on
which such certificate is furnished to the employer, whichever is later,
and at the election of the employer such certificate may be made
effective with respect to any payment of wages made on or after the date
on which such certificate is furnished.''
Meaning of Terms
Section 1 of act Aug. 9, 1955, provided that: ``The terms used in
this Act [amending subsecs. (a) and (j) of this section] shall have the
same meaning as when used in the Internal Revenue Code.''
Section Referred to in Other Sections
This section is referred to in sections 31, 275, 3401, 3405, 3406,
3505, 3507, 3509, 3510, 4999, 6040, 6051, 6205, 6413, 6682, 7205 of this
title; title 25 section 2719; title 42 sections 407, 659.
