[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(b)(3)-1]

[Page 39-40]
 
                       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(b)(3)-1  Family employment.

    (a) Certain services are excepted from employment because of the 
existence of a family relationship between the employee and the 
individual employing him. The exceptions are as follows:
    (1) Services performed by an individual in the employ of his or her 
spouse;
    (2) (i) Services performed before 1961 by a father or mother in the 
employ of his or her son or daughter;
    (ii) Services not in the course of the employer's trade or business, 
or domestic service in a private home of the employer, performed after 
1960 but prior to 1968 by a father or mother in the employ of his or her 
son or daughter;
    (iii) Services not in the course of the employer's trade or 
business, or domestic service in a private home of the employer, 
performed after 1967 by a father or mother in the employ of his or her 
son or daughter unless (a) the employer has a child (including an 
adopted child or stepchild) living in his or her home who is under age 
18 or who has a mental or physical condition which requires the personal 
care and supervision of an adult for at least 4 continuous weeks in the 
calendar quarter in which the services are rendered; and (b) the 
employer is during the calendar quarter in which the services are 
rendered:
    (1) A widow or widower;
    (2) A divorced person who has not remarried; or
    (3) A married person who has a spouse living in the home who has a 
mental or physical condition which results in such spouse's being 
incapable of caring for such child for at least 4 continuous weeks in 
the calendar quarter in which the services are rendered; and
    (3) Services performed by a son or daughter under the age of 21 in 
the employ of his or her father or mother.
    (b) Under paragraph (a) (1) and (2) (i) of this section, the 
exception is conditioned solely upon the family relationship between the 
employee and the individual employing him. Under paragraph (a)(2) (ii) 
and (iii) of this section, in addition to the family relationship, there 
is a further requirement that the services performed after 1960 and 
before 1968 for purposes of paragraph (a)(2)(ii) and after 1967 for 
purposes of paragraph (a)(2)(iii) shall be services not in the course of 
the employer's trade or business or shall be domestic service in a 
private home of the employer. The terms ``services not in the course of 
the employer's trade or business'' and ``domestic service in a private 
home of the employer'' have the same meaning as when used in Sec. 
31.3121(a) (7)-1, except that it is immaterial under paragraphs (a)(2) 
(ii) and (iii) of this section whether or not such services are 
performed on a farm operated for profit. The mere fact that a mental or 
physical disability, whether temporary or permanent, renders a child or 
spouse incapable of self-support does not necessarily mean that the 
child requires the personal care and supervision of an adult or that the 
spouse is incapable of caring for a child within the meaning of 
paragraph (a)(2)(iii) of this section. A

[[Page 40]]

written statement by a doctor of the existence of the mental or physical 
condition of the child or spouse which states that the child requires 
the personal care and supervision of an adult or that the spouse is 
incapable of caring for a child and which sets forth the period of time 
during which the condition has existed and is likely to exist will 
usually be sufficient evidence to establish the existence and duration 
of the condition at the time of the statement. Under paragraph (a)(3) of 
this section, in addition to the family relationship, there is a further 
requirement that the son or daughter shall be under the age of 21, and 
the exception continues only during the time that the son or daughter is 
under the age of 21.
    (c) Services performed in the employ of a corporation are not within 
the exception. Services performed in the employ of a partnership are not 
within the exception unless the requisite family relationship exists 
between the employee and each of the partners comprising the 
partnership.

[T.D. 6516, 25 FR 13032, Dec. 20, 1960, as amended by T.D. 6744, 29 FR 
8311, July 2, 1964; T.D. 7374, 40 FR 30950, July 24, 1975]