[Code of Federal Regulations]
[Title 26, Volume 15]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR31.3102-1]

[Page 16-17]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 31_EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE--Table 
 
  Subpart B_Federal Insurance Contributions Act (Chapter 21, Internal 
                          Revenue Code of 1954)
 
Sec.  31.3102-1  Collection of, and liability for, employee tax; in 

general.

    (a) The employer shall collect from each of his employees the 
employee tax with respect to wages for employment performed for the 
employer by the employee. The employer shall make the collection by 
deducting or causing to be deducted the amount of the employee tax from 
such wages as and when paid. (For provisions relating to the time of 
such payment, see Sec.  31.3121(a)-2.) The employer is required to 
collect the tax, notwithstanding the wages are paid in something other 
than money, and to pay over the tax in money. (As to the exclusion from 
wages of remuneration paid in any medium other than cash for certain 
types of services, see Sec.  31.3121(a)(7)-1, relating to such 
remuneration paid for service not in the course of the employer's trade 
or business or for domestic service in a private home of the employer; 
and Sec.  31.3121(a)(8)-1, relating to such remuneration paid for 
agricultural labor.) For provisions relating to the collection of, and 
liability for, employee tax in respect of tips, see Sec.  31.3102-3.
    (b) The employer is permitted, but not required, to deduct amounts 
equivalent to employee tax from payments to an employee of cash 
remuneration to which the sections referred to in this paragraph (b) are 
applicable prior to the time that the sum of such payments equals--
    (1) $100 in the calendar year, for service not in the course of the 
employer's trade or business, to which Sec.  31.3121(a)(7)-1 is 
applicable;
    (2) The applicable dollar threshold (as defined in section 3121(x)) 
in the calendar year, for domestic service in a private home of the 
employer, to which Sec.  31.3121(a)(7)-1 is applicable;
    (3) $150 in the calendar year, for agricultural labor, to which 
Sec.  31.3121(a)(8)-1(c)(1)(i) is applicable; or
    (4) $100 in the calendar year, for service performed as a home 
worker, to which Sec.  31.3121(a)(10)-1 is applicable.
    (c) At such time as the sum of the cash payments in the calendar 
year for a type of service referred to in paragraph (b)(1), (b)(2), 
(b)(3) or (b)(4) of this section equals or exceeds the amount specified, 
the employer is required to collect from the employee any amount of 
employee tax not previously deducted. If an employer pays cash 
remuneration to an employee for two or more of the types of service 
referred to in paragraph (b)(1), (b)(2), (b)(3) or (b)(4) of this 
section, the provisions of paragraph (b) of this section and this 
paragraph (c) are to be applied separately to the amount of remuneration 
attributable to each type of service. For provisions relating to the 
repayment to an employee, or other disposition, of amounts deducted from 
an employee's remuneration in excess of the correct amount of employee 
tax, see Sec.  31.6413(a)-1.
    (d) In collecting employee tax, the employer shall disregard any 
fractional part of a cent of such tax unless it amounts to one-half cent 
or more, in which case it shall be increased to 1 cent. The employer is 
liable for the employee tax with respect to all wages paid by him to 
each of his employees whether or not it is collected from the employee. 
If, for example, the employer deducts less than the correct amount of 
tax, or if he fails to deduct any part of the tax, he is nevertheless 
liable for the correct amount of the tax. Until collected from him the 
employee also is liable for the employee tax with respect to all the 
wages received by him. Any employee tax collected by or on behalf of an 
employer is a special fund in trust for the United States. See section 
7501. The employer is indemnified against the claims and demands of any 
person for the amount of any payment of such tax made by the employer to 
the district director.
    (e)(1) The provisions of paragraphs (a) and (d) of this section 
apply to any payment made on or after January 1, 1955.
    (2) The provisions of paragraphs (b) and (c) of this section that 
apply to any payment made for service not in the course of the 
employer's trade or business or for service performed as a home worker 
within the meaning of section 3121(d)(3)(C) apply to any such payment 
made on or after January 1, 1978. The provisions of paragraphs (b)

[[Page 17]]

and (c) of this section that apply to any payment made for domestic 
service in a private home of the employer apply to any such payment made 
on or after January 1, 1994. The provisions of paragraphs (b) and (c) of 
this section that apply to any payment made for agricultural labor apply 
to any such payment made on or after January 1, 1988. For rules 
applicable to any payment for these services made prior to the dates set 
forth in this paragraph (e)(2), see Sec.  31.3102-1 in effect at such 
time (see 26 CFR part 31 contained in the edition of 26 CFR Parts 30 to 
39, revised as of April 1, 2006).

[T.D. 6516, 25 FR 13032, Dec. 20, 1960, as amended by T.D. 6744, 29 FR 
8305, July 2, 1964; T.D. 7001, 34 FR 998, Jan. 23, 1969; T.D. 9266, 71 
FR 35154, June 19, 2006]