§ 1401. — Rate of tax.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 26USC1401]
TITLE 26--INTERNAL REVENUE CODE
Subtitle A--Income Taxes
CHAPTER 2--TAX ON SELF-EMPLOYMENT INCOME
Sec. 1401. Rate of tax
(a) Old-age, survivors, and disability insurance
In addition to other taxes, there shall be imposed for each taxable
year, on the self-employment income of every individual, a tax equal to
the following percent of the amount of the self-employment income for
such taxable year:
In the case of a taxable year
Beginning after: And before: Percent:
December 31, 1983............ January 1, 1988............ 11.40
December 31, 1987............ January 1, 1990............ 12.12
December 31, 1989......................................... 12.40
(b) Hospital insurance
In addition to the tax imposed by the preceding subsection, there
shall be imposed for each taxable year, on the self-employment income of
every individual, a tax equal to the following percent of the amount of
the self-employment income for such taxable year:
In the case of a taxable year
Beginning after: And before: Percent:
December 31, 1983............ January 1, 1985............ 2.60
December 31, 1984............ January 1, 1986............ 2.70
December 31, 1985......................................... 2.90.
(c) Relief from taxes in cases covered by certain international
agreements
During any period in which there is in effect an agreement entered
into pursuant to section 233 of the Social Security Act with any foreign
country, the self-employment income of an individual shall be exempt
from the taxes imposed by this section to the extent that such self-
employment income is subject under such agreement to taxes or
contributions for similar purposes under the social security system of
such foreign country.
(Aug. 16, 1954, ch. 736, 68A Stat. 353; Sept. 1, 1954, ch. 1206, title
II, Sec. 208(a), 68 Stat. 1093; Aug. 1, 1956, ch. 836, title II,
Sec. 202(a), 70 Stat. 845; Pub. L. 85-840, title IV, Sec. 401(a), Aug.
28, 1958, 72 Stat. 1041; Pub. L. 87-64, title II, Sec. 201(a), June 30,
1961, 75 Stat. 140; Pub. L. 89-97, title I, Sec. 111(c)(4), title III,
Sec. 321(a), July 30, 1965, 79 Stat. 342, 394; Pub. L. 90-248, title I,
Sec. 109(a)(1), (b)(1), Jan. 2, 1968, 81 Stat. 835, 836; Pub. L. 92-336,
title II, Sec. 204 (a)(1), (b)(1), July 1, 1972, 86 Stat. 420, 421; Pub.
L. 92-603, title I, Sec. 135(a)(1), (b)(1), Oct. 30, 1972, 86 Stat.
1362, 1363; Pub. L. 93-233, Sec. 6(b)(1), Dec. 31, 1973, 87 Stat. 955;
Pub. L. 94-455, title XIX, Sec. 1901(a)(154), Oct. 4, 1976, 90 Stat.
1789; Pub. L. 95-216, title I, Sec. 101(a)(3), (b)(3), title III,
Sec. 317(b)(1), Dec. 20, 1977, 91 Stat. 1511, 1512, 1539; Pub. L. 98-21,
title I, Sec. 124(a), (b), Apr. 20, 1983, 97 Stat. 89; Pub. L. 101-508,
title XI, Sec. 11801(a)(36), (c)(16), Nov. 5, 1990, 104 Stat. 1388-521,
1388-527.)
References in Text
Section 233 of the Social Security Act, referred to in subsec. (c),
is classified to section 433 of Title 42, The Public Health and Welfare.
Amendments
1990--Subsecs. (c), (d). Pub. L. 101-508 redesignated subsec. (d) as
(c) and struck out former subsec. (c) which provided a credit against
self-employment taxes imposed by this section.
1983--Subsec. (a). Pub. L. 98-21, Sec. 124(a), amended subsec. (a)
generally, substituting a table for former pars. (1) to (7) which had
imposed a tax on the self-employment income of every individual (1) in
the case of any taxable year beginning before Jan. 1, 1978, to be equal
to 7.0 percent of the amount of the self-employment income for such
taxable year; (2) in the case of any taxable year beginning after Dec.
31, 1977, and before Jan. 1, 1979, to be equal to 7.10 percent of the
amount of the self-employment income for such taxable year; (3) in the
case of any taxable year beginning after Dec. 31, 1978, and before Jan.
1, 1981, to be equal to 7.05 percent of the amount of the self-
employment income for such taxable year; (4) in the case of any taxable
year beginning after Dec. 31, 1980, and before Jan. 1, 1982, to be equal
to 8.00 percent of the amount of the self-employment income for such
taxable year; (5) in the case of any taxable year beginning after Dec.
31, 1981, and before Jan. 1, 1985, to be equal to 8.05 percent of the
amount of the self-employment income for such taxable year; (6) in the
case of any taxable year beginning after Dec. 31, 1984, and before Jan.
1, 1990, to be equal to 8.55 percent of the amount of the self-
employment income for such taxable year; and (7) in the case of any
taxable year beginning after Dec. 31, 1989, to be equal to 9.30 percent
of the amount of the self-employment income for such taxable year.
Subsec. (b). Pub. L. 98-21, Sec. 124(a), amended subsec. (b)
generally, substituting a table for former pars. (1) to (6) which had
imposed a tax on the self-employment income of every individual (1) in
the case of any taxable year beginning after Dec. 31, 1973, and before
Jan. 1, 1978, to be equal to 0.90 percent of the amount of the self-
employment income for such taxable year; (2) in the case of any taxable
year beginning after Dec. 31, 1977, and before Jan. 1, 1979, to be equal
to 1.00 percent of the amount of the self-employment income for such
taxable year; (3) in the case of any taxable year beginning after Dec.
31, 1978, and before Jan. 1, 1981, to be equal to 1.05 percent of the
amount of the self-employment income for such taxable year; (4) in the
case of any taxable year beginning after Dec. 31, 1980, and before Jan.
1, 1985, to be equal to 1.30 percent of the amount of the self-
employment income for such taxable year; (5) in the case of any taxable
year beginning after Dec. 31, 1984, and before Jan. 1, 1986, to be equal
to 1.35 percent of the amount of the self-employment income for such
taxable year; and (6) in the case of any taxable year beginning after
Dec. 31, 1985, to be equal to 1.45 percent of the amount of the self-
employment income for such taxable year.
Subsecs. (c), (d). Pub. L. 98-21, Sec. 124(b), added subsec. (c) and
redesignated former subsec. (c) as (d).
1977--Subsec. (a). Pub. L. 95-216, Sec. 101(a)(3), substituted
provisions calling for a graduated increase in the tax from 7.0 percent
for taxable years beginning before Jan. 1, 1978, to 9.30 percent for
taxable years beginning after Dec. 31, 1989, for provisions under which
the tax had been set at 7.0 percent without any increase in the rate in
future years.
Subsec. (b). Pub. L. 95-216, Sec. 101(b)(3), substituted ``after
December 31, 1977, and before January 1, 1979'' for ``after December 31,
1977, and before January 1, 1981'' and ``1.00 percent'' for ``1.10
percent'' in par. (2), substituted ``after December 31, 1978, and before
January 1, 1981'' for ``after December 31, 1980, and before January 1,
1986'' and ``1.05 percent'' for ``1.35 percent'' in par. (3),
substituted ``after December 31, 1980, and before January 1, 1985'' for
``after December 31, 1985'' and ``1.30 percent'' for ``1.50 percent'' in
par. (4), and added pars. (5) and (6).
Subsec. (c). Pub. L. 95-216, Sec. 317(b)(1), added subsec. (c).
1976--Subsec. (a). Pub. L. 94-455, Sec. 1901(a)(154)(A), among other
changes, substituted provisions relating to a uniform tax rate of 7
percent on self-employment income of every individual for provisions
relating to varied tax rate of 5.8 percent of the amount of self-
employment income for any taxable year beginning after Dec. 31, 1967,
and before Jan. 1, 1969, 6.3 percent for any taxable year beginning
after Dec. 31, 1968, and before Jan. 1, 1971, 6.9 percent for any
taxable year beginning after Dec. 31, 1970, and before Jan. 1, 1973, and
7.0 percent for any taxable year beginning after Dec. 31, 1972.
Subsec. (b). Pub. L. 94-455, Sec. 1901(a)(154)(B), redesignated
pars. (3) to (6) as (1) to (4). Former pars. (1) and (2), which related
to a 6 percent tax rate on self-employment income for any taxable year
beginning after Dec. 31, 1967, and before Jan. 1, 1974, and 1 percent
tax rate on self-employment income for any taxable year beginning after
Dec. 31, 1972, and before Jan. 1, 1974, were struck out.
1973--Subsec. (b)(2). Pub. L. 93-233 substituted ``1974'' for
``1978''.
Subsec. (b)(3). Pub. L. 93-233 substituted ``1973'' and ``1978'' for
``1977'' and ``1981'' and decreased the rate of tax from 1.25 percent to
0.90 percent.
Subsec. (b)(4). Pub. L. 93-233 substituted ``1977'' and ``1981'' for
``1980'' and ``1986'' and decreased the rate of tax from 1.35 percent to
1.10 percent.
Subsec. (b)(5). Pub. L. 93-233 substituted ``beginning after
December 31, 1980, and before January 1, 1986'' for ``beginning after
December 31, 1985'' and decreased the rate of tax from 1.45 percent to
1.35 percent.
Subsec. (b)(6). Pub. L. 93-233 added par. (6).
1972--Subsec. (a)(3). Pub. L. 92-603, Sec. 135(a)(1)(A), substituted
``1973'' for ``1978''.
Subsec. (a)(4). Pub. L. 92-603, Sec. 135(a)(1)(B), substituted
provisions that in the case of taxable years beginning after Dec. 31,
1972, the tax shall be equal to 7.0 percent of the amount of the self-
employment income for such taxable year, for provisions that in the case
of taxable years beginning after Dec. 31, 1977, and before Jan. 1, 2011,
the tax shall be equal to 6.7 percent of the amount of the self-
employment income for such taxable year.
Subsec. (a)(5). Pub. L. 92-603, Sec. 135(a)(1)(B), struck out par.
(5) which provided that in the case of taxable years beginning after
Dec. 31, 2010, the tax shall be equal to 7.0 percent of the amount of
the self-employment income for the taxable year.
Subsec. (a)(3) to (5). Pub. L. 92-336, Sec. 204(a)(1), substituted
``January 1, 1978'' for ``January 1, 1973'' and struck out ``and'' after
``such taxable year'' in par. (3), extended from any taxable year
beginning after December 31, 1972 to any taxable year beginning after
December 31, 1977, and before January 1, 2011, and decreased from 7.0
percent to 6.7 percent the provisions relating to the tax on self-
employment income in par. (4), and added par. (5).
Subsec. (b)(2). Pub. L. 92-603, Sec. 135(b)(1), increased the rate
of tax from 0.9 percent to 1.0 percent.
Subsec. (b)(3). Pub. L. 92-603, Sec. 135(b)(1), substituted ``1981''
for ``1986'' and ``1.25'' for ``1.0''.
Subsec. (b)(4). Pub. L. 92-603, Sec. 135(b)(1), substituted ``1980''
for ``1985'', ``1986'' for ``1993'', and ``1.35'' for ``1.1''.
Subsec. (b)(5). Pub. L. 92-603, Sec. 135(b)(1), substituted ``1985''
for ``1992'' and ``1.45'' for ``1.2''.
Subsec. (b)(2) to (5). Pub. L. 92-336, Sec. 204(b)(1), substituted
``1978'' for ``1976'' and ``0.9'' for ``0.65'' in subsec. (b)(2),
``1977'' for ``1975'', ``1986'' for ``1980'' and ``1.0'' for ``0.70'' in
par. (3), ``1985'' for ``1979'', ``1993'' for ``1987'' and ``1.1'' for
``0.80'' in par. (4), and ``1992'' for ``1986'' and ``1.2'' for ``0.90''
in par. (5).
1968--Subsecs. (a)(1) to (4). Pub. L. 90-248, Sec. 109(a)(1),
substituted ``December 31, 1967'' and ``January 1, 1969'' for ``December
31, 1965'' and ``January 1, 1967'' in par. (1), ``December 31, 1968'',
``January 1, 1971'' and ``6.3'' for ``December 31, 1966'', ``January 1,
1969'', and ``5.9'' in par. (2), and ``December 31, 1970'' and ``6.9''
for ``December 31, 1968'' and ``6.6'' in par. (3), and reenacted par.
(4) without change.
Subsec. (b)(1) to (5). Pub. L. 90-248, Sec. 109(b)(1), struck out
par. (1) provision for rate of 0.35 percent of amount of self-employment
income for any taxable year beginning after Dec. 31, 1965, and before
Jan. 1, 1967, redesignated former pars. (2) to (6) as (1) to (5),
substituted ``December 31, 1967'' for ``December 31, 1966'' in such par.
(1) and increased the rate by 0.10 percent to 0.60, 0.65, 0.70, 0.80,
and 0.90 in pars. (1) to (5), respectively.
1965--Pub. L. 89-97, Sec. 321(a), divided the total tax imposed
under the entire section for each taxable year upon the self-employment
income for such taxable year into two separate taxes by dividing the
section into subsecs. (a) and (b), with subsec. (a) reflecting the tax
for old-age, survivors, and disability insurance and subsec. (b)
reflecting a separate tax for hospital insurance; reduced from 6.2
percent to 6.15 percent the rate of total tax imposed under the entire
section for taxable years beginning after Dec. 31, 1965, and before Jan.
1, 1967 (resulting from a tax of 5.8 percent under subsec. (a) and 0.35
percent under subsec. (b)), increased from 6.2 percent to 6.4 percent
the rate for taxable years beginning after Dec. 31, 1966, and before
Jan. 1, 1968 (resulting from a tax of 5.9 percent under subsec. (a) and
0.50 percent under subsec. (b)), reduced from 6.9 percent to 6.4 percent
the rate for taxable years beginning after Dec. 31, 1967, and before
Jan. 1, 1969 (resulting from a tax of 5.9 percent under subsec. (a) and
0.50 percent under subsec. (b)), increased from 6.9 percent to 7.1
percent the rate for taxable years beginning after Dec. 31, 1968, and
before Jan. 1, 1973 (resulting from a tax of 6.6 percent under subsec.
(a) and 0.50 percent under subsec. (b)), from 6.9 percent to 7.55
percent the rate for taxable years beginning after Dec. 31, 1972, and
before Jan. 1, 1976 (resulting from a tax of 7.0 percent under subsec.
(a) and 0.55 percent under subsec. (b)), from 6.9 percent to 7.60
percent the rate for taxable years beginning after Dec. 31, 1975, and
before Jan. 1, 1980 (resulting from a tax of 7.0 percent under subsec.
(a) and 0.60 percent under subsec. (b)), from 6.9 percent to 7.70
percent the rate for taxable years beginning after Dec. 31, 1979, and
before Jan. 1, 1987 (resulting from a tax of 7.0 percent under subsec.
(a) and 0.70 percent under subsec. (b)), and from 6.9 percent to 7.80
percent the rate for taxable years beginning after Dec. 31, 1986
(resulting from a tax of 7.0 percent under subsec. (a) and 0.80 percent
under subsec. (b)), and provided that the exclusion of employee
representatives by section 1402(c)(3) should not apply for purposes of
the tax imposed by subsec. (b).
Subsec. (b). Pub. L. 89-97, Sec. 111(c)(4), struck out provision
that for purposes of the tax imposed by this subsection, the exclusion
of employee representatives by section 1402(c)(3) shall not apply.
1961--Pub. L. 87-64 increased the rate of tax for taxable years
beginning after Dec. 31, 1961, and before Jan. 1, 1963, from 4\1/2\ to
4.7 percent, taxable years beginning after Dec. 31, 1962, and before
Jan. 1, 1966, from 5\1/4\ to 5.4 percent, taxable years beginning after
Dec. 31, 1965, and before Jan. 1, 1968, from 6 to 6.2 percent, taxable
year beginning after Dec. 31, 1967, and before Jan. 1, 1969, from 6 to
6.9 percent, and taxable years beginning after Dec. 31, 1968, from 6\3/
4\ to 6.9 percent.
1958--Pub. L. 85-840 increased the rate of tax by substituting
provisions imposing a tax of 3\3/4\ percent for taxable years beginning
after Dec. 31, 1958, 4\1/2\ percent for years beginning after Dec. 31,
1959, 5\1/4\ percent for years beginning after Dec. 31, 1962, 6 percent
for years beginning after Dec. 31, 1965, and 6\3/4\ percent for years
beginning after Dec. 31, 1968, for provisions which imposed a tax of
3\3/8\ percent for taxable years beginning after Dec. 31, 1956, 4\1/8\
percent for years beginning after Dec. 31, 1959, 4\7/8\ percent for
years beginning after Dec. 31, 1964, 5\5/8\ percent for years beginning
after Dec. 31, 1969, and 6\3/8\ percent for years beginning after Dec.
31, 1974.
1956--Act Aug. 1, 1956, increased the rate of tax for all taxable
years beginning after Dec. 31, 1956, by three-eighths percent.
1954--Act Sept. 1, 1954, increased the 4\7/8\ percent rate of tax on
self-employment income for taxable years beginning after Dec. 31, 1969,
to 5\1/4\ percent for taxable years beginning after Dec. 31, 1969, and
before Jan. 1, 1975, and 6 percent for taxable years beginning after
Dec. 31, 1974.
Effective Date of 1983 Amendment
Section 124(d) of Pub. L. 98-21 provided that:
``(1) In general.--Except as provided in paragraph (2), the
amendments made by this section [amending this section, sections 32,
164, 275, 401, and 1402 of this title, and section 411 of Title 42, The
Public Health and Welfare] shall apply to taxable years beginning after
December 31, 1983.
``(2) Subsection (c).--The amendments made by subsection (c)
[amending sections 32, 164, 275, 401, and 1402 of this title and section
411 of Title 42] shall apply to taxable years beginning after December
31, 1989.''
Effective Date of 1977 Amendment
Section 104 of title I of Pub. L. 95-216 provided that: ``The
amendments made by this title [amending this section, sections 3101 and
3111 of this title, and sections 401, 415, and 430 of Title 42, The
Public Health and Welfare] shall apply with respect to remuneration paid
or received, and taxable years beginning, after 1977.''
Effective Date of 1976 Amendment
Amendment by Pub. L. 94-455 effective for taxable years beginning
after Dec. 31, 1976, see section 1901(d) set out as a note under section
2 of this title.
Effective Date of 1973 Amendment
Section 6(c) of Pub. L. 93-233 provided that: ``The amendment made
by subsection (b)(1) [amending this section] shall apply only with
respect to taxable years beginning after December 31, 1973. The
remaining amendments made by this section [amending sections 3101 and
3111 of this title] shall apply only with respect to remuneration paid
after December 31, 1973.''
Effective Date of 1972 Amendments
Section 135(c) of Pub. L. 92-603 provided that: ``The amendments
made by subsections (a)(1) and (b)(1) [amending this section] shall
apply only with respect to taxable years beginning after December 31,
1972. The remaining amendments made by this section [amending sections
3101 and 3111 of this title] shall apply only with respect to
remuneration paid after December 31, 1972.''
Section 204(c) of Pub. L. 92-336 provided that: ``The amendments
made by subsections (a)(1) and (b)(1) [amending this section] shall
apply only with respect to taxable years beginning after December 31,
1972. The remaining amendments made by this section [amending sections
3101 and 3111 of this title] shall apply only with respect to
remuneration paid after December 31, 1972.''
Effective Date of 1968 Amendment
Section 109(c) of Pub. L. 90-248 provided that: ``The amendments
made by subsections (a)(1) and (b)(1) [amending this section] shall
apply only with respect to taxable years beginning after December 31,
1967. The remaining amendments made by this section [amending sections
3101 and 3111 of this title] shall apply only with respect to
remuneration paid after December 31, 1967.''
Effective Date of 1965 Amendment
Amendment by section 111(c)(4) of Pub. L. 89-97 applicable to
calendar year 1966 or to any subsequent calendar year but only if by
October 1 immediately preceding such calendar year the Railroad
Retirement Tax Act [section 3201 et seq. of this title] provides for a
maximum amount of monthly compensation taxable under such Act during all
months of such calendar year equal to one-twelfth of maximum wages which
Federal Insurance Contributions Act [section 3101 et seq. of this title]
provides may be counted for such calendar year, see section 111(e) of
Pub. L. 89-97, set out as an Effective Date note under section 1395i-1
of Title 42, The Public Health and Welfare.
Section 321(d) of Pub. L. 89-97 provided that: ``The amendments made
by subsection (a) [amending this section] shall apply only with respect
to taxable years beginning after December 31, 1965. The amendments made
by subsections (b) and (c) [amending sections 3101 and 3111 of this
title] shall apply only with respect to remuneration paid after December
31, 1965.''
Effective Date of 1961 Amendment
Section 201(d) of Pub. L. 87-64 provided that: ``The amendment made
by subsection (a) [amending this section] shall apply with respect to
taxable years beginning after December 31, 1961. The amendments made by
subsections (b) and (c) [amending sections 3101 and 3111 of this title]
shall apply with respect to remuneration paid after December 31, 1961.''
Effective Date of 1958 Amendment
Section 401(d) of Pub. L. 85-840 provided that: ``The amendment made
by subsection (a) [amending this section] shall apply with respect to
taxable years beginning after December 31, 1958. The amendments made by
subsections (b) and (c) [amending sections 3101 and 3111 of this title]
shall apply with respect to remuneration paid after December 31, 1958.''
Effective Date of 1956 Amendment
Section 202(d) of act Aug. 1, 1956, provided that: ``The amendment
made by subsection (a) [amending this section] shall apply with respect
to taxable years beginning after December 31, 1956. The amendments made
by subsections (b) and (c) [amending sections 3101 and 3111 of this
title] shall apply with respect to remuneration paid after December 31,
1956.''
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.
Land Diverted Under 1983 Payment-in-Kind Program
Land diverted from production of agricultural commodities under a
1983 payment-in-kind program to be treated, for purposes of this
chapter, as used during the 1983 crop year by qualified taxpayers in the
active conduct of the trade or business of farming, with qualified
taxpayers who materially participate in the diversion and devotion to
conservation uses under a 1983 payment-in-kind program to be treated as
materially participating in the operation of such land during the 1983
crop year, see section 3 of Pub. L. 98-4, set out as a note under
section 61 of this title.
Deduction by or Credit Against Individual Income Tax for Taxes Paid Into
Foreign Social Security System Pursuant to International Agreement
Section 317(b)(4) of Pub. L. 95-216 provided that: ``Notwithstanding
any other provision of law, taxes paid by any individual to any foreign
country with respect to any period of employment or self-employment
which is covered under the social security system of such foreign
country in accordance with the terms of an agreement entered into
pursuant to section 233 of the Social Security Act [section 433 of Title
42, The Public Health and Welfare] shall not, under the income tax laws
of the United States, be deductible by, or creditable against the income
tax of, any such individual.''
Section Referred to in Other Sections
This section is referred to in sections 24, 164, 1402, 3231, 6213 of
this title; title 42 sections 910, 911, 1395i.
