1122.Exclusions from Trade or Business
1122.1What exclusions apply to trade and businesses for Social Security purposes?
The term “trade or business” does not include the following for Social Security purposes:
Work as an employee, except newspaper vendors who are age 18 or older;
Work by U.S. citizens performing services in the U.S. as employees of a foreign government and, in some circumstances, as employees of an instrumentality wholly owned by a foreign government, or an international organization;
Employees of a State or political subdivision thereof who are paid solely on a fee basis and whose services are not otherwise covered as employment under a Federal-State coverage agreement (see §1125);
Work as an employee or employee representative covered by the Railroad Retirement system;
Work as a public official (except public officials of a State or political subdivision who are paid solely on a fee basis and whose services are not covered under a Federal-State coverage agreement) (see §1126);
Self-employment by members of certain religious sects exempt from self-employment taxes;
Services performed by ordained, commissioned or licensed ministers if they elected to be exempted from coverage under the Internal Revenue Code, and by members of religious orders who have not taken a vow of poverty;
Services performed by Christian Science practitioners, if they have elected to be exempted from coverage under the Internal Revenue Code; or
Deemed self-employment income of employees of church or church-controlled organizations that have elected to be exempt from payment of Social Security taxes for its employees.
1122.2What trade or business rules apply to religious orders?
The term “trade or business” does not include services by a member of a religious order who has taken a vow of poverty when these services are performed in the exercise of the duties required by the order. However, effective October 30, 1972, these services may be covered as employment for the order if the order irrevocably elects coverage for its entire active membership and its lay employees. (For rules that apply see §932.)
Last Revised: Aug. 25, 2009