26 U.S.C. § 3127 — Exemption for employers and their em-

Page 2732 TITLE 26—INTERNAL REVENUE CODE § 3127 Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section, except as otherwise provided, effective with respect to payments due with respect to wages paid after Dec. 31, 1986, including wages paid after such date by a State (or political subdivision thereof) that modi- fied its agreement pursuant to section 418(e)(2) of Title 42, The Public Health and Welfare, see section 9002(d) of Pub. L. 99–509, set out as an Effective Date of 1986 Amendment note under section 418 of Title 42. § 3127. Exemption for employers and their em- ployees where both are members of religious faiths opposed to participation in Social Se- curity Act programs (a) In general Notwithstanding any other provision of this chapter (and under regulations prescribed to carry out this section), in any case where— (1) an employer (or, if the employer is a partnership, each partner therein) is a member of a recognized religious sect or division there- of described in section 1402(g)(1) and an adher- ent of established tenets or teachings of such sect or division as described in such section, and has filed and had approved under sub- section (b) an application (in such form and manner, and with such official, as may be pre- scribed by such regulations) for an exemption from the taxes imposed by section 3111, and (2) an employee of such employer who is also a member of such a religious sect or division and an adherent of its established tenets or teachings has filed and had approved under subsection (b) an identical application for ex- emption from the taxes imposed by section 3101, such employer shall be exempt from the taxes imposed by section 3111 with respect to wages paid to each of the employees thereof who meets the requirements of paragraph (2) and each such employee shall be exempt from the taxes im- posed by section 3101 with respect to such wages paid to him by such employer. (b) Approval of application An application for exemption filed by an em- ployer (or a partner) under subsection (a)(1) or by an employee under subsection (a)(2) shall be approved only if— (1) such application contains or is accom- panied by the evidence described in section 1402(g)(1)(A) and a waiver described in section 1402(g)(1)(B), (2) the Commissioner of Social Security makes the findings (with respect to such sect or division) described in section 1402(g)(1)(C), (D), and (E), and (3) no benefit or other payment referred to in section 1402(g)(1)(B) became payable (or, but for section 203 of the Social Security Act, would have become payable) to the individual filing the application at or before the time of such filing. (c) Effective period of exemption An exemption granted under this section to any employer with respect to wages paid to any of the employees thereof, or granted to any such employee, shall apply with respect to wages paid by such employer during the period— (1) commencing with the first day of the first calendar quarter, after the quarter in which such application is filed, throughout which such employer (or, if the employer is a partnership, each partner therein) or employee meets the applicable requirements specified in subsections (a) and (b), and (2) ending with the last day of the calendar quarter preceding the first calendar quarter thereafter in which (A) such employer (or, if the employer is a partnership, any partner therein) or the employee involved does not meet the applicable requirements of sub- section (a), or (B) the sect or division thereof of which such employer (or, if the employer is a partnership, any partner therein) or em- ployee is a member is found by the Commis- sioner of Social Security to have ceased to meet the requirements of subsection (b)(2). (Added Pub. L. 100–647, title VIII, § 8007(a)(1), Nov. 10, 1988, 102 Stat. 3781; amended Pub. L. 101–239, title X, § 10204(b)(1), Dec. 19, 1989, 103 Stat. 2474; Pub. L. 103–296, title I, § 108(h)(3), Aug. 15, 1994, 108 Stat. 1487; Pub. L. 115–141, div. U, title IV, § 401(b)(35), Mar. 23, 2018, 132 Stat. 1204.) Editorial Notes REFERENCES IN TEXT Section 203 of the Social Security Act, referred to in subsec. (b)(3), is classified to section 403 of Title 42, The Public Health and Welfare. PRIOR PROVISIONS A prior section 3127 was renumbered section 3128 of this title. AMENDMENTS 2018—Subsec. (b)(3). Pub. L. 115–141 struck out ‘‘or 222(b)’’ after ‘‘section 203’’. 1994—Subsecs. (b)(2), (c)(2). Pub. L. 103–296 substituted ‘‘Commissioner of Social Security’’ for ‘‘Secretary of Health and Human Services’’. 1989—Subsec. (a). Pub. L. 101–239, § 10204(b)(1)(B), sub- stituted ‘‘the employees thereof’’ for ‘‘his employees’’ in concluding provisions. Subsec. (a)(1). Pub. L. 101–239, § 10204(b)(1)(A), inserted ‘‘(or, if the employer is a partnership, each partner therein)’’ after ‘‘an employer’’. Subsec. (b). Pub. L. 101–239, § 10204(b)(1)(C), inserted ‘‘(or a partner)’’ after ‘‘an employer’’ in introductory provisions. Subsec. (c). Pub. L. 101–239, § 10204(b)(1)(D), sub- stituted ‘‘the employees thereof’’ for ‘‘his employees’’ in introductory provisions. Subsec. (c)(1). Pub. L. 101–239, § 10204(b)(1)(E), inserted ‘‘(or, if the employer is a partnership, each partner therein)’’. Subsec. (c)(2). Pub. L. 101–239, § 10204(b)(1)(F), sub- stituted ‘‘such employer (or, if the employer is a part- nership, any partner therein) or the employee involved does not meet’’ for ‘‘such employer or the employee in- volved ceases to meet’’ in cl. (A) and inserted ‘‘(or, if the employer is a partnership, any partner therein)’’ after ‘‘such employer’’ in cl. (B). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–296 effective Mar. 31, 1995, see section 110(a) of Pub. L. 103–296, set out as a note under section 401 of Title 42, The Public Health and Welfare. EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–239, title X, § 10204(b)(2), Dec. 19, 1989, 103 Stat. 2474, provided that: ‘‘The amendments made by Page 2733 TITLE 26—INTERNAL REVENUE CODE § 3131 this subsection [amending this section] shall be effec- tive as if they were included in the amendments made by section 8007(a)(1) of the Technical and Miscellaneous Revenue Act of 1988 (102 Stat. 3781) [Pub. L. 100–647].’’ EFFECTIVE DATE Section applicable to wages paid after Dec. 31, 1988, see section 8007(d) of Pub. L. 100–647, set out as an Ef- fective Date of 1988 Amendment note under section 1402 of this title. SAVINGS PROVISION For provisions that nothing in amendment by Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining li- ability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115–141, set out as a note under section 23 of this title. § 3128. Short title This chapter may be cited as the ‘‘Federal In- surance Contributions Act.’’ (Aug. 16, 1954, ch. 736, 68A Stat. 429, § 3125; re- numbered § 3126, Pub. L. 86–778, title I, § 103(q)(1), Sept. 13, 1960, 74 Stat. 939; renumbered § 3127, Pub. L. 99–509, title IX, § 9002(a)(1), Oct. 21, 1986, 100 Stat. 1970; renumbered § 3128, Pub. L. 100–647, title VIII, § 8007(a)(1), Nov. 10, 1988, 102 Stat. 3781.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–509, except as otherwise provided, effective with respect to payments due with respect to wages paid after Dec. 31, 1986, including wages paid after such date by a State (or political sub- division thereof) that modified its agreement pursuant to section 418(e)(2) of Title 42, The Public Health and Welfare, see section 9002(d) of Pub. L. 99–509, set out as a note under section 418 of Title 42. Subchapter D—Credits Sec. 3131. Credit for paid sick leave. 3132. Payroll credit for paid family leave. 3133. Special rule related to tax on employers. 3134. Employee retention credit for employers sub- ject to closure due to COVID–19. Editorial Notes AMENDMENTS 2021—Pub. L. 117–2, title IX, § 9651(c), Mar. 11, 2021, 135 Stat. 182, added item 3134. § 3131. Credit for paid sick leave (a) In general In the case of an employer, there shall be al- lowed as a credit against applicable employment taxes for each calendar quarter an amount equal to 100 percent of the qualified sick leave wages paid by such employer with respect to such cal- endar quarter. (b) Limitations and refundability (1) Wages taken into account The amount of qualified sick leave wages taken into account under subsection (a), plus any increases under subsection (e), with re- spect to any individual shall not exceed $200 ($511 in the case of any day any portion of which is paid sick time described in paragraph (1), (2), or (3) of section 5102(a) of the Emer- gency Paid Sick Leave Act, applied with the modification described in subsection (c)(2)(A)(i)) for any day (or portion thereof) for which the individual is paid qualified sick leave wages. (2) Overall limitation on number of days taken into account The aggregate number of days taken into ac- count under paragraph (1) for any calendar quarter shall not exceed the excess (if any) of— (A) 10, over (B) the aggregate number of days so taken into account during preceding calendar quarters in such calendar year (other than the first quarter of calendar year 2021). (3) Credit limited to certain employment taxes The credit allowed by subsection (a) with re- spect to any calendar quarter shall not exceed the applicable employment taxes for such cal- endar quarter on the wages paid with respect to the employment of all employees of the em- ployer. (4) Refundability of excess credit (A) Credit is refundable If the amount of the credit under sub- section (a) exceeds the limitation of para- graph (3) for any calendar quarter, such ex- cess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b). (B) Advancing credit In anticipation of the credit, including the refundable portion under subparagraph (A), the credit shall be advanced, according to forms and instructions provided by the Sec- retary, up to an amount calculated under subsection (a), subject to the limits under paragraph (1) and (2), all calculated through the end of the most recent payroll period in the quarter. (c) Qualified sick leave wages For purposes of this section— (1) In general The term ‘‘qualified sick leave wages’’ means wages paid by an employer which would be required to be paid by reason of the Emer- gency Paid Sick Leave Act as if such Act ap- plied after March 31, 2021. (2) Rules of application For purposes of determining whether wages are qualified sick leave wages under paragraph (1)— (A) In general The Emergency Paid Sick Leave Act shall be applied— (i) by inserting ‘‘, the employee is seek- ing or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID–19 and such employee has been ex- posed to COVID–19 or the employee’s em- ployer has requested such test or diag-