[Code of Federal Regulations]
[Title 26, Volume 15]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR31.3121(a)(9)-1]

[Page 31-32]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 31_EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX AT SOURCE--Table of Contents
 
  Subpart B_Federal Insurance Contributions Act (Chapter 21, Internal 
                          Revenue Code of 1954)
 
Sec. 31.3121(a)(9)-1  Payments to employees for nonwork periods.

    (a) The term ``wages'' does not include any payment (other than 
vacation or sick pay) made by an employer to an employee for a period 
throughout which the employment relationship exists between the employer 
and the employee, but in which the employee does not work (other than 
being subject to call for the performance of work) for the employer, if 
such payment is made after the calendar month in which--
    (1) The employee attains age 65, if the employee is a man to whom 
the payment is made before January 1975, or if the employee is a woman 
to whom the payment is made before November 1956, or
    (2) The employee attains age 62, if the employee is a man to whom 
the payment is made after December 1974, or if the employee is a woman 
to whom the payment is made after October 1956.
    (b) Vacation or sick pay is not within this exclusion from wages. If 
the employee does any work for the employer in the period for which the 
payment is made, no remuneration paid by such employer to such employee 
with respect to such period is within this exclusion from wages.

    Example. Mrs. A, an employee of X, attained the age of 62 on 
September 15, 1956, and discontinued the performance of regular work for 
X on September 30, 1956. Their employment relationship continued for 
several years until Mrs. A's death, and X paid Mrs. A $50 per month as 
consideration for Mrs. A's agreement to work when asked by X. The 
payment for each month was made on the first day of each succeeding 
month. After September 30, 1956, the only work performed by Mrs. A for X 
was performed on one day in October 1956. The payment made by X to Mrs. 
A on November 1 (for October 1956) is not excluded from wages under this 
exception, but the payments made thereafter are

[[Page 32]]

excluded from wages. The payment on November 1 was not excluded because 
Mrs. A worked for X on one day in October 1956. (Inasmuch as Mrs. A had 
attained age 62 in September 1956, the November 1 payment would have 
been excluded if Mrs. A had not performed any work for X in October 
1956.)

[T.D. 6744, 29 FR 8309, July 2, 1964, as amended by T.D. 7373, 40 FR 
30957, July 24, 1975; 40 FR 32831, Aug. 5, 1975]