June 14, 2010
Cert. Granted in Medical Resident FICA Case
The Supreme Court of the United States granted certiorari in Mayo Foundation v. United State, a challenge to the government's position that compensation paid to medical residents is subject to FICA taxation. The U.S. Court of Appeals for the Eighth Circuit held that FICA taxation does apply because the regulation limiting the student FICA exception to students who are not full-time employees was a permissible interpretation of the relevant statute, reversing a federal district court decision to the contrary. The regulation at issue was effective as of April 1, 2005, and the IRS has taken the position that medical residents were excepted from FICA taxes before that date.
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