Rev. Rul. 55-584

Advice has been requested, for purposes of the Federal Insurance Contributions Act (chapter 21, subtitle C, Internal Revenue Code of 1954) as to (1) whether an employer may, in determining the first $4,200 of wages paid to his employee during the year, take into consideration wages paid to such employee by other employers during the year; and (2) whether an employer may obtain a refund of employer tax paid with respect to wages paid an employee where wages are also paid the same employee by other employers during the same year and the total of all such wages exceeds $4,200.

Although section 6413(c)(1) of the 1954 Code provides that an employee is entitled to a credit or refund of employee tax collected with respect to the excess of wages received from more than one employer within any calendar year after 1954 over the first $4,200 of such wages, no such provision is made with respect to the employer tax. See Rev. Rul. 54-221, C.B. 1954-1, 73, relating to an employee's wages in excess of $3,600 under the 1939 Code.

Section 3111 of the Act imposes on every employer an excise tax, with respect to having individuals in his employ, equal to a certain percentage of the wages up to $4,200 paid by him with respect to employment. Accordingly, an employer may not, in determining the first $4,200 of wages paid to an employee during a calendar year, take into consideration wages paid to the employee by another employer during that year except under circumstances contemplated in section 3121(a)(1) of the Act relative to predecessor-successor employers. See Rev. Rul. 55-585, page 395, this Bulletin.

In the Senate Report No. 734, Seventy-sixth Congress, First Session, on the Social Security Act Amendments of 1939, C.B. 1939-2, 565 at 574, the Committee on Finance stated:

No ground for relief exists in the case of the employer's tax. Each employer will and should be liable for the tax with respect to the first $3,000 paid to each employee notwithstanding the employee may be receiving, or may later in the year receive, wages from another employer.

No change, other than the wage limitation ($4,200), has been made in the special refund provision of law in any of the subsequent amendments of the Internal Revenue Code. From the foregoing, it is evident that the Congress did not intend the special refund provisions to be applicable to the employer tax under the Federal Insurance Contributions Act. Accordingly, an employer may not obtain a refund of any portion of the employer tax paid on the first $4,200 of wages of an employee during a calendar year who has previously received, is receiving, or will receive wages from another employer during that year, the total of which exceeds or will exceed $4,200, unless such other employer is a predecessor employer as contemplated in section 3121(a)(1) of the Act. See Rev. Rul. 55-585, below