Document ID: ./input/supremecourt_opinions/opinions/13pdf/12-1408_6468.pdf
Page Number: 10.0

Cite as:  572 U. S. ____ (2014) 

7 

Opinion of the Court 

“[d]ismissal  payments  which  the  employer  is  not  legally 
required  to  make.”  Social  Security  Act  Amendments  of 
1939,  §606,  53  Stat.  1384  (codified  at  26  U.  S.  C. 
§1426(a)(4) (1940 ed.)).

In  1950,  however,  Congress  repealed  that  exception.
Social  Security  Act  Amendments,  §203(a),  64  Stat.  525–
527.  “When  Congress  acts  to  amend  a  statute,  we  pre-
sume  it  intends  its  amendment  to  have  real  and  sub- 
stantial  effect.”  Stone  v.  INS,  514  U. S.  386,  397  (1995). 
Congress has not revisited its 1950 amendment; and since 
that time, FICA has contained no exception for severance 
payments. 

B 
The  next  question  is  whether  §3402(o)  of  the  Internal
Revenue  Code  relating  to  income-tax  withholding  is  a 
limitation  on  the  meaning  of  “wages”  for  FICA  purposes.
Section 3402 provides: 

“(o)  Extension  of  withholding  to  certain  pay-
ments other than wages. 

“(1) General rule
“For purposes of this chapter (and so much of subti-

tle F as relates to this chapter)—

“(A) any supplemental unemployment compensation 

benefit paid to an individual, 
.

 .

 .

 .

 . 

“shall be treated as if it were a payment of wages by an
employer to an employee for a payroll period.” 

(Pursuant  to  stipulations  by  the  parties,  the  Court  of
Appeals  determined  that  the  severance  payments  consti-
tute  “supplemental  unemployment  compensation  bene-
fits,” or SUBs.  See §3402(o)(2)(A).  The Court assumes, for 
purposes of this case, that this premise is correct.)

Quality  Stores  argues  that  §3402(o)’s  instruction  that
SUBs  be  treated  “as  if ”  they  were  wages  for  purposes  of