(3) Transportation systems acquired after 1950. All service performed in the employ of a State or political subdivision thereof in connection with its operation of a public transportation system constitutes covered transportation service if the transportation system was not operated by the State or political subdivision prior to 1951 and, at the time of its first acquisition after 1950 from private ownership of any part of its transportation system, the State or political subdivision did not have a general retirement system covering substantially all service performed in connection with the operation of the transportation system.

(4) Definitions. For the purposes of this paragraph:

(i) The term "general retirement system" means any pension, annuity, retirement, or similar fund or system established by a State or by a political subdivision thereof for employees of the State, political subdivision, or both; but such term does not include such a fund or system which covers only service performed in positions connected with the operation of its public transportation system.

(ii) A transportation system or a part thereof is considered to have been acquired by a State or political subdivision from private ownership if prior to the acquisition service performed by employees in connection with the operation of the system or an acquired part thereof constituted employment under the Act or was covered by an agreement entered into between a State and the Secretary of Health, Education, and Welfare pursuant to section 218 of the Act, and some of such employees became employees of the State or political subdivision in connection with and at the time of such acquisition.

(iii) The term "political subdivision" includes an instrumentality of a State, of one or more political subdivisions of a State, or of a State and one or more of its political subdivisions.

(iv) The term "employment" includes service covered by an agreement entered into between a State and the Secretary of Health, Education, and Welfare pursuant to section 218 of the Act.

(c) Employees of the District of Columbia. Service performed after September 30, 1965, as an employee of the District of Columbia or a wholly owned instrumentality thereof constitutes service in employment unless:

(1) The service is covered by a retirement system established by a law of the United States;

(2) The service is performed in a hospital or penal institution by a patient or inmate thereof;

(3) The service is performed by a student nurse, student dietitian, student physical therapist, or student occupational therapist or other student employee (other than a medical or dental intern or medical or dental resident-intraining) assigned or attached to a hospital, clinic, or medical or dental laboratory operated by any department, agency, or instrumentality of the Federal Government or by the District of Columbia.

(4) The service is performed by an individual serving on a temporary basis in case of fire, storm, snow, earthquake, flood, or other similar emergency; or

(5) The service is performed by an individual serving as a member of a board, committee, or council of the District of Columbia who is paid on a per diem, meeting, or other fee basis.

[32 F.R. 7762, May 27, 1967]

§ 404.1014a Services in the employ of the governments of American Samoa and Guam.

(a) American Samoa. Services in the employ of the government of American Samoa, its political subdivisions, or any instrumentality of any one or more of the foregoing wholly owned thereby, performed by an officer or employee thereof (including a member of the legislature of such government or political subdivision) where excepted from employment prior to 1961. However, this exception is not applicable after 1960. An officer or employee of the government of American Samoa whose service as such is not covered by a retirement system established by a law of the United States is not regarded as an employee of the United States or any agency or instrumentality thereof for purposes of title II of the Act. The remuneration for such service by such an employee (including fees paid to a public officer) is deemed to have been paid by the government of American Samoa, or by a political subdivision thereof or an instrumentality of one or more of the foregoing, whichever is appropriate.

(b) Guam. Services in the employ of the government of Guam, its political subdivisions, or any instrumentality of any one or more of the foregoing wholly

owned thereby, performed by an officer or employee thereof (including a member of the legislature of such government or political subdivision) are excepted from employment.

[32 F.R. 7763, May 27, 1967]

§ 404.1015

Ministers of churches and members of religious orders.

(a) In general. Services performed by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry, or by a member of a religious order in the exercise of duties required by such order, are excepted from employment. For provisions relating to the election available to certain ministers and members of religious orders to have the Federal old-age, survivors, and disability insurance system established by Title II of the Social Security Act extended to certain services performed by them, see section 1402(e) of the Internal Revenue Code of 1954 (26 U.S.C. 1402(e)).

(b) Service by a minister in the exercise of his ministry. Except as provided in paragraph (c) (2) of this section, service performed by a minister in the exercise of his ministry includes the ministration of sacerdotal functions and the conduct of religious worship, and the control, conduct, and maintenance of religious organizations (including the religious boards, societies, and other integral agencies of such organizations), under the authority of a religious body constituting a church or church denomination. The following rules are applicable in determining whether services performed by a minister are performed in the exercise of his ministry:

(1) Whether service performed by a minister constitutes the conduct of religious worship or the ministration of sacerdotal functions depends on the tenets and practices of the particular religious body constituting his church or church denomination.

(2) Service performed by a minister in the control, conduct, and maintenance of a religious organization relates to directing, managing, or promoting the activities of such organization. Any religious organization is deemed to be under the authority of a religious body constituting a church or church denomination if it is organized and dedicated to carrying out the tenets and principles of a faith in accordance with either the requirements or sanctions governing the creation of institutions of the faith. The

term "religious organization" has the same meaning and application as is given to the term for income tax purposes under the Internal Revenue Code of 1954.

(3) If a minister is performing service in the conduct of religious worship or the ministration of sacerdotal functions, such service is in the exercise of his ministry whether or not it is performed for a religious organization. This rule may be illustrated by the following example:

Example. M, a duly ordained minister, is engaged to perform service as chaplain at a privately owned university. M devotes his entire time to performing his duties as chaplain which include the conduct of religious worship, offering spiritual counsel to the university students, and teaching a class in religion. M is performing service in the exercise of his ministry.

(4) If a minister is performing service for an organization which is operated as an integral agency of a religious organization under the authority of a religious body constituting a church or church denomination, all service performed by the minister in the conduct of religious worship, in the ministration of sacerdotal functions, or in the control, conduct, and maintenance of such organization is in the exercise of his ministry. This rule may be illustrated by the following example:

Example. M, a duly ordained minister, is engaged by the N Religious Board to serve as director of one of its departments. He performs no other service. The N Religious Board is an integral agency of O, a religious organization operating under the authority of a religious body constituting a church denomination. M is performing service in the exercise of his ministry.

(5) If a minister, pursuant to an assignment or designation by a religious body constituting his church, performs service for an organization which is neither a religious organization nor operated as an integral agency of a religious organization, all service performed by him, even though such service may not involve the conduct of religious worship or the ministration of sacerdotal functions, is in the exercise of his ministry. This rule may be illustrated by the following example:

Example. M, a duly ordained minister, is assigned by X, the religious body constituting his church, to perform advisory service to Y company in connection with the publication of a book dealing with the history of M's church denomination. Y is neither a

religious organization nor operated as an integral agency of a religious organization. M performs no other service for X or Y. M is performing service in the exercise of his ministry.

(6) If a minister is performing service for an organization which is neither a religious organization nor operated as an integral agency of a religious organization and the service is not performed pursuant to an assignment or designation by his ecclesiastical superiors, then only the service performed by him in the conduct of religious worship or the ministration of sacerdotal functions is in the exercise of his ministry. (See, however, paragraph (c) (2) of this section.) This rule may be illustrated by the following example:

Example. M, a duly ordained minister, is engaged by N University to teach history and mathematics. He performs no other service for N although from time to time he performs marriages and conducts funerals for relatives and friends. N University is neither a religious organization nor operated as an integral agency of a religious organization. M is not performing the service for N pursuant to an assignment or designation by his ecclesiastical superiors. The service performed by M for N University is not in the exercise of his ministry. However, service performed by M in performing marriages and conducting funerals is in the exercise of his ministry.

(c) Service by a minister not in the exercise of his ministry. (1) Service performed by a duly ordained, commissioned, or licensed minister of a church which is not in the exercise of his ministry is not excepted from employment.

(2) Service performed by a duly ordained, commissioned, or licensed minister of a church as an employee of the United States, or a State, territory, or possession of the United States, or the District of Columbia, or a foreign government, or a political subdivision of any of the foregoing, is not in the exercise of his ministry, even though such service may involve the ministration of sacerdotal functions or the conduct of religous worship. Thus, for example, service performed by an individual as a chaplain in the Armed Forces of the United States is considered to be performed by a commissioned officer in his capacity as such, and not by a minister in the exercise of his ministry. Similarly, service performed by an employee of a State as a chaplain in a State prison is considered to be performed by a civil servant of the State

and not by a minister in the exercise of his ministry.

(d) Service in the exercise of duties required by a religious order. Service performed by a member of a religious order in the exercise of duties required by such order includes all duties required of the member of the order. The nature or extent of such service is immaterial so long as it is a service which he is directed or required to perform by his ecclesiastical superiors.

[32 F.R. 7763, May 27, 1967]

§ 404.1016 Religious, charitable, educational, or certain other organizations exempt from income tax.

(a) In general. Services performed by an employee in the employ of a religious, charitable, educational, or other organization described in section 501(c)(3) of the Internal Revenue Code of 1954 which is exempt from income tax under section 501(a) of the Internal Revenue Code of 1954 (sec. 101(6) of the Internal Revenue Code of 1939) are excepted from employment. However, this exception does not apply to services performed during the period for which a certificate (Form SS-15, Certificate Waiving Exemption from Taxes, or SS-15b, Certificate for Retroactive Coverage), filed pursuant to section 3121(k) of the Internal Revenue Code of 1954 or section 1426(1) of the Internal Revenue Code of 1939, is in effect if such services are performed by an employee (1) whose signature appears on Form SS-15b or on the list (Form SS-15a, List to Accompany Certificate on Form SS-15, or Form SS15a Supplement, Amendment to List on Form SS-15a) filed by such organization under section 3121(k) of the Internal Revenue Code of 1954 (sec. 1426 (1) of the Internal Revenue Code of 1939), (2) who became an employee of such organization after the calendar quarter in which the SS-15 was filed, or (3) became a member of a group of employees as described in section 3121(k) (1) (E) of the Internal Revenue Code of 1954 after the calendar quarter in which the SS-15 was filed with respect to such group. (See § 404.1015(b) (2) and (3) relating to services performed by a minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order; § 404.1019 relating to services performed in the employ of an organization otherwise exempt from income tax under sec. 501(a) of the Internal Revenue Code of

1954 (sec. 101 of the Internal Revenue Code of 1939); § 404.1019 relating to services performed in the employ of a school, college, or university by certain students; and § 404.1022 relating to services performed by certain student nurses and hospital interns. See 26 CFR 31.3121 (k)-1 relating to waiver of exemption from taxes with respect to certain services under sec. 3121(k) of the Internal Revenue Code of 1954.)

(b) Crediting of certain remuneration paid by exempt organization; law in effect before July 30, 1965-(1) General. Remuneration paid before July 1, 1960, to an individual for services performed after 1950, in the employ of an organization of the type described in paragraph (a) of this section which either had not filed a certificate described in that paragraph, or had filed such a certificate but the individual did not sign the list described in that paragraph, is nevertheless deemed to constitute remuneration for employment under Title II of the Social Security Act: Provided, The following conditions are met:

(i) The services are excepted from employment by section 210(a) (8) (B) of the Act (see paragraph (a) of this section);

(ii) The services would have constituted employment as defined in section 210 of the Act if the requirements therefor of section 3121(k) (1) of the Internal Revenue Code of 1954 (or corresponding provisions of prior law) were satisfied;

(iii) The organization paid before August 11, 1960, any amount, as taxes imposed by section 3101 and 3111 of the Internal Revenue Code of 1954 (or corresponding provisions of prior law), with respect to such remuneration paid by the organization to the individual for such services;

(iv) The individual or a fiduciary acting for such individual or his estate, or his survivor (that is, the individual's spouse, former wife divorced, child, or parent who survived such individual) filed a request prior to July 30, 1965, that such remuneration be deemed to constitute remuneration for employment for purposes of Title II of the Act (see paragraph (e) of this section);

(v) The organization had filed a certificate pursuant to section 3121(k) (1) of the Internal Revenue Code of 1954 (or corresponding provisions of prior law) on or before the date the request described in subdivision (iv) of this subparagraph is made, or the organization

no longer has any individual in its employ for remuneration at the time such request is made;

(vi) If the individual was in the employ of the organization referred to in subdivision (v) of this subparagraph at any time during the 24-month period following the calendar quarter in which the certificate was filed, the organization paid an amount as taxes under sections 3101 and 3111 of the Internal Revenue Code of 1954 (or corresponding provisions of prior law) with respect to remuneration paid by the organization to the individual during some portion of such 24-month period;

(vii) If credit or refund of any portion of the amount referred to in subdivision (iii) of this subparagraph (other than a credit or refund which would be allowed if the services constituted employment for purposes of chapter 21 of the Internal Revenue Code of 1954) has been obtained, the amount credited or refunded (including any interest under sec. 6611) is repaid before January 1, 1963.

(2) Services performed by employee after calendar quarter in which request filed. Any individual whose remuneration is deemed to constitute remuneration for employment by virtue of the application of subparagraph (1) of this paragraph is, for purposes of clause (ii) and (iii) of section 210(a) (8) (B) of the Social Security Act and of clauses (ii) and (iii) of section 3121(b) (8) (B) of the Internal Revenue Code of 1954, deemed to have become an employee of such organization (or to have become a member of a group described in sec. 3121(k) (1) (E) of the Internal Revenue Code of 1954) on the first day of the calendar quarter following the quarter in which his request is filed if:

(i) He performed services as an employee of the organization on or after the date on which his request was filed, and

(ii) The SS-15 filed by the organization pursuant to section 3121(k)(1) of the Internal Revenue Code of 1954 (or corresponding provisions of prior law) is not effective with respect to services performed by such individual before the first day of the calendar quarter following the quarter in which his request is filed.

(c) Crediting of certain remuneration paid by exempt organization; law in effect after July 29, 1965; individual not employed by organization when SS-15 filed. Remuneration paid to an individ

ual for services performed in the employ of an organization of the type described in paragraph (a) of this section during any quarter from the effective date of the organization's SS-15 or SS-15b through the last day of the quarter just before the quarter in which the SS-15 was filed is deemed remuneration for employment under title II of the Act if:

(1) The individual (or a fiduciary acting for him or his estate, or his surviving spouse, surviving divorced wife or mother, child, or parent) files with a Social Security Administration district office, a request that the remuneration be deemed to constitute remuneration for employment for purposes of Title II of the Social Security Act (see paragraph (e) of this section);

(2) The organization had filed an SS15 on or before the date the request described in subparagraph (1) of this paragraph was filed;

(3) The SS-15 or SS-15b is effective for the period for which the request was filed;

(4) The individual performed services in the employ of the organization before the quarter in which the organization filed its SS-15 and received remuneration for such services;

(5) The individual was no longer employed by the organization when it filed its SS-15;

(6) The services are excepted from employment by section 210(a) (8) (B) of the Act (see paragraph (a) of this section);

(7) The services would have constituted employment as defined in section 210 of the Act if the individual had signed the organization's list of concurring employees (SS-15a or SS-15a supplement); or, if the organization filed an SS-15b, the services performed by the individual during the retroactive period covered by the SS-15b would have constituted employment as defined in section 210 of the Act if he had signed the SS-15b;

(8) The organization paid any amount as taxes imposed by sections 3101 and 3111 of the Internal Revenue Code of 1954 (or corresponding provisions of prior law) with respect to such remuneration;

(9) A part of such taxes was paid on or before the due date of the tax return for the quarter just before the quarter in which the organization filed its SS-15; and

(10) If a refund or credit was obtained on any part of such taxes, the refund or credit (including any interest under section 6611 of such Code) is repaid on or before December 31, 1967, or, if later, before the first day of the third year after the year in which the organization filed its SS-15. (This requirement does not apply to a credit or refund which would be allowed if the services constituted employment for purposes of ch. 21 of the Internal Revenue Code of 1954.) The request will not be approved unless it contains a statement that the refund or credit has been repaid.

(d) Crediting of certain remuneration paid by exempt organization; law in effect after July 29, 1965; individual employed by organization when SS-15 filed. Remuneration paid to an individual for services performed in the employ of an organization of the type described in paragraph (a) of this section during any quarter from the effective date of the organization's SS-15 or SS-15b through June 30, 1965, is deemed remuneration for employment under title II of the Act if:

(1) The individual (or a fiduciary acting for him or his estate, or his surviving spouse, surviving divorced wife or mother, child, or parent) files with a Social Security Administration district office, a request that the remuneration be deemed to constitute remuneration for employment for purposes of Title II of the Social Security Act (see paragraph (e) of this section);

(2) The organization had filed an SS15 before July 30, 1965;

(3) The organization's SS-15 or SS15b is effective for the period for which the request described in subparagraph (1) of this paragraph was filed;

(4) The individual performed services in the employ of the organization and was paid for such services before July 1, 1965;

(5) The individual was an employee of the organization when it filed its SS-15;

(6) The services are excepted from employment by section 210(a) (8) (B) of the Act (see paragraph (a) of this section);

(7) The services would have constituted employment as defined in section 210 of the Act if the individual had signed the organization's list of concurring employees (SS-15a or SS-15a supplement) filed in time to cover the period in which the services were performed, or, if the organization filed an SS-15b, the