I

107TH CONGRESS

1ST SESSION H. R. 1079

To amend the Internal Revenue Code of 1986 to change certain threshold

and other tests in order to decrease the amount of farm labor wages

that are subject to Social Security and Medicare taxes, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 15, 2001

Mr. LEWIS of Kentucky (for himself and Mr. SCHAFFER) introduced the

following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to change

certain threshold and other tests in order to decrease

the amount of farm labor wages that are subject to

Social Security and Medicare taxes, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. CHANGES IN THRESHOLD AND OTHER TESTS

2 FOR DETERMINING AMOUNT OF WAGES PAID

3 TO AGRICULTURAL WORKERS THAT ARE SUB4 JECT TO SOCIAL SECURITY AND MEDICARE

5 TAXES.

6 (a) INCREASE IN $150 REMUNERATION THRESHOLD

7 TO $1,000 AND INCREASE IN TOTAL FARM PAYROLL

8 TEST.—

9 (1) INTERNAL REVENUE CODE OF 1986.—Sub10 paragraph (B) of section 3121(a)(8) of the Internal

11 Revenue Code of 1986 (relating to definition of

12 wages) is amended—

13 (A) in clause (i), by striking ‘‘$150’’ and

14 inserting ‘‘$1,000’’; and

15 (B) in clause (ii), by striking ‘‘$2500’’ and

16 inserting ‘‘$50,000’’.

17 (2) SOCIAL SECURITY ACT.—Subparagraph (B)

18 of section 209(a)(7) of the Social Security Act (42

19 U.S.C. 409(a)(7)(B)) (relating to definition of

20 wages) is amended—

21 (A) in clause (i), by striking ‘‘$150’’ and

22 inserting ‘‘$1,000’’; and

23 (B) in clause (ii), by striking ‘‘$2500’’ and

24 inserting ‘‘$50,000’’.

25 (b) ADJUSTMENT FOR INFLATION.—
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1 (1) INTERNAL REVENUE CODE OF 1986.—Sub2 section (i) of section 3121 of the Internal Revenue

3 Code of 1986 (relating to computation of wages in

4 certain cases) is amended by adding at the end the

5 following new paragraph:

6 ‘‘(6) AGRICULTURAL LABOR.—

7 ‘‘(A) IN GENERAL.—For purposes of this

8 chapter, in the case of agricultural labor re9 ferred to in subsection (a)(8), in the case of a

10 calendar year after 2001, the $1,000 amount

11 contained in subparagraph (B)(i), and the

12 $50,000 amount contained in subparagraph

13 (B)(ii), shall each be increased by an amount

14 equal to—

15 ‘‘(i) such dollar amount, multiplied by

16 ‘‘(ii) the cost-of-living adjustment de17 termined under section 1(f)(3) for the cal18 endar year in which the taxable year be19 gins by substituting ‘calendar year 2000’

20 for ‘calendar year 1992’ in subparagraph

21 (B) thereof.

22 ‘‘(B) ROUNDING.—If any increase deter23 mined under subparagraph (A) is not a multiple

24 of $50, such increase shall be rounded to the

25 next lowest multiple of $50.’’.
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1 (2) SOCIAL SECURITY ACT.—Section 209 of the

2 Social Security Act (42 U.S.C. 409) is amended by

3 adding at the end the following new subsection:

4 ‘‘(l)(1) For purposes of this title, in the case of agri5 cultural labor referred to in subsection (a)(7), in the case

6 of a calendar year after 2001, the $1,000 amount con7 tained in subparagraph (B)(i), and the $50,000 amount

8 contained in subparagraph (B)(ii), shall each be increased

9 in the same manner as the $1,000 amount and the

10 $50,000 amount, respectively, contained in section

11 3121(a)(8)(B) of the Internal Revenue Code of 1986 are

12 increased pursuant to section 3121(i)(6) of such Code.’’.

13 (c) EXEMPTION FOR SERVICE PERFORMED BY CER14 TAIN FULL TIME STUDENTS.—

15 (1) INTERNAL REVENUE CODE OF 1986.—Sec16 tion 3121(b) of the Internal Revenue Code of 1986

17 (relating to definition of employment) is amended by

18 striking ‘‘or’’ at the end of paragraph (20), by strik19 ing the period at the end of paragraph (21) and in20 serting ‘‘; or’’, and by adding at the end the fol21 lowing new paragraph:

22 ‘‘(22) agricultural labor performed by a full

23 time student who has not attained 18 years of age.’’.
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1 (2) SOCIAL SECURITY ACT.—Section 210(a) of

2 the Social Security Act (42 U.S.C. 410(a)) is

3 amended—

4 (A) by striking ‘‘or’’ at the end of para5 graph (20),

6 (B) by striking the period at the end of

7 paragraph (21) and inserting ‘‘; or’’, and

8 (C) by inserting after paragraph (21) the

9 following new paragraph:

10 ‘‘(22) Agricultural labor performed by a full

11 time student who has not attained 18 years of age.’’.

12 (d) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to remuneration paid after Decem14 ber 31, 2001.

15 SEC. 2. COORDINATION OF COLLECTION OF AGRICUL16 TURAL LABOR EMPLOYMENT TAXES WITH

17 COLLECTION OF INCOME TAXES.

18 (a) IN GENERAL.—Subsection (c) of section 3510 of

19 the Internal Revenue Code of 1986 (relating to coordina20 tion of collection of domestic service employment taxes

21 with collection of income taxes) is amended to read as fol22 lows:

23 ‘‘(c) ELIGIBLE EMPLOYMENT TAXES.—

24 ‘‘(1) IN GENERAL.—For purposes of this sec25 tion, the term ‘eligible employment taxes’ means—
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1 ‘‘(A) domestic service employment taxes,

2 and

3 ‘‘(B) agricultural labor employment taxes.

4 ‘‘(2) DOMESTIC SERVICE EMPLOYMENT

5 TAXES.—For purposes of paragraph (1), the term

6 ‘domestic service employment taxes’ means—

7 ‘‘(A) any taxes imposed by chapter 21 or

8 23 on remuneration paid for domestic service in

9 a private home of the employer, and

10 ‘‘(B) any amount withheld from such re11 muneration pursuant to an agreement under

12 section 3402(p).

13 For purposes of this paragraph, the term ‘domestic

14 service in a private home of the employer’ includes

15 domestic service described in section 3121(g)(5).

16 ‘‘(3) AGRICULTURAL LABOR EMPLOYMENT

17 TAXES.—For purposes of paragraph (1), the term

18 ‘agricultural labor employment taxes’ means—

19 ‘‘(A) any taxes imposed by chapter 21 or

20 23 on remuneration paid for agricultural labor,

21 and

22 ‘‘(B) any amount withheld from such re23 muneration pursuant to an agreement under

24 section 3402(p).
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1 For purposes of this paragraph, the term ‘agricul2 tural labor’ has the meaning provided in section

3 3121(g).’’.

4 (b) CONFORMING AMENDMENTS.—

5 (1) The heading of section 3510 of such Code

6 is amended by inserting ‘‘AND AGRICUL7 TURAL LABOR’’ after ‘‘DOMESTIC SERV8 ICE’’.

9 (2) Subsections (a)(1), (b)(1), (e), and (f)(1) of

10 such section are each amended by striking ‘‘domestic

11 service employment taxes’’ and inserting ‘‘eligible

12 employment taxes’’.

13 (3) The heading of subsection (b) of such sec14 tion is amended by striking ‘‘DOMESTIC SERVICE’’

15 and inserting ‘‘ELIGIBLE’’.

16 (4) Subsection (d) and the first sentence of sub17 section (f)(1) of such section are each amended by

18 inserting before the period at the end the following:

19 ‘‘or for agricultural labor’’.

20 (5) Subsection (e) of such section is amended

21 by inserting before the period at the end the fol22 lowing: ‘‘and agricultural labor employers’ income

23 taxes’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to remuneration paid after Decem3 ber 31, 2001.

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