[Code of Federal Regulations]
[Title 26, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.31-2]

[Page 101-102]
 
                       TITLE 26--INTERNAL REVENUE
 
     CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY
 
PART 1--INCOME TAXES--Table of Contents
 
Sec. 1.31-2  Credit for ``special refunds'' of employee social security tax.

    (a) In general. (1) In the case of an employee receiving wages from 
more than one employer during the calendar year, amounts may be deducted 
and withheld as employee social security tax with respect to more than 
$3,600 of wages received during the calendar year 1954, and with respect 
to more than $4,200 of wages received during a calendar year after 1954. 
For example, employee social security tax may be deducted and withheld 
on $5,000 of wages received by an employee during a particular calendar 
year if the employee is paid wages in such year in the amount of $3,000 
by one employer and in the amount of $2,000 by another employer. Section 
6413(c) (as amended by section 202 of the Social Security Amendments of 
1954 (68 Stat. 1089)), permits, under certain conditions, a so-called 
``special refund'' of the amount of employee social security tax 
deducted and withheld with respect to wages paid to an employee in a 
calendar year after 1954 in excess of $4,200 ($3,600 for the calendar 
year 1954) by reason of the employee receiving wages from more than one 
employer during the calendar year. For provisions relating to the 
imposition of the employee tax and the limitation on wages, see with 
respect to the calendar year 1954, sections 1400 and 1426(a)(1) of the 
Internal Revenue Code of 1939 and, with respect to calendar years after 
1954, sections 3101 and 3121(a)(1) of the Internal Revenue Code of 1954, 
as amended by sections 208(b) and 204(a), respectively, of the Social 
Security Amendments of 1954 (68 Stat. 1094, 1091).
    (2) An employee who is entitled to a special refund of employee tax 
with respect to wages received during a calendar year and who is also 
required to file an income tax return for such calendar year (or for his 
last taxable year beginning in such calendar year) may obtain the 
benefits of such special refund only by claiming credit for such special 
refund in the same manner as if such special refund were an amount 
deducted and withheld as income tax at the source. For provisions for 
claiming special refunds for 1955 and subsequent years in the case of 
employees not required to file income tax returns, see section 6413(c) 
and the regulations thereunder. For provisions relating to such refunds 
for 1954, see 26 CFR (1939) 408.802 (regulations 128).
    (3) The amount of the special refund allowed as a credit shall be 
considered as an amount deducted and withheld as income tax at the 
source under chapter 24 of the Internal Revenue Code of 1954 (or, in the 
case of a special refund for 1954, subchapter D, chapter 9 of the 
Internal Revenue Code of 1939). If the amount of such special refund 
when added to amounts deducted and withheld as income tax exceeds the 
taxes imposed by subtitle A of the Internal Revenue Code of 1954, the 
amount of the excess constitutes an overpayment of income tax under 
Subtitle A, and interest on such overpayment is allowed to the extent 
provided under section 6611 upon an overpayment of income tax resulting 
from a credit for income

[[Page 102]]

tax withheld at source. See section 6401(b).
    (b) Federal and State employees and employees of certain foreign 
corporations. The provisions of this section shall apply to the amount 
of a special refund allowable to an employee of a Federal agency or a 
wholly owned instrumentality of the United States, to the amount of a 
special refund allowable to an employee of any State or political 
subdivision thereof (or any instrumentality of any one or more of the 
foregoing), and to the amount of a special refund allowable to employees 
of certain foreign corporations. See, with respect to such special 
refunds for 1954, section 1401(d)(4) of the Internal Revenue Code of 
1939, and with respect to such special refunds for 1955 and subsequent 
years, section 6413(c)(2) of the Internal Revenue Code of 1954, as 
amended by section 202 of the Social Security amendments of 1954.