Rev. Rul. 85-74

1985-1 C.B. 331, 1985-23 I.R.B. 18.

REGISTERED NURSE; EMPLOYED FULL-TIME BY HOSPITAL; ENROLLED IN NURSES'

TRAINING SCHOOL

Published: June 10, 1985

Section 3121.-Definitions, 26 CFR 31.312(b)(13)-1: Services of student nurse or hospital intern.

(Also Section 3306; 31.3306(c)(13)- 1.)

  Registered nurse; employed full-time by hospital; enrolled in nurses' training school. The services of a registered nurse who is employed full-time by hospital are not excepted from employment for FICA and FUTA purposes even though the nurse is also enrolled and regularly attending classes in a specialized program at a nurses' training school.

ISSUE

  Are the services of a nurse employed by a hospital excepted from 'employment' pursuant to sections 3121(b)(13) and 3306(c)(13) of the Internal Revenue Code, under the circumstances described below?

FACTS

  A, a registered nurse in state ST, is employed full-time as a nurse in a private hospital. A performs the same services as the other registered nurses in the hospital and receives the same salary. A is also enrolled and regularly attends classes in a specialized program at a nurses' training school chartered by ST.

LAW AND ANALYSIS

  Section 3121(b) of the Code defines the term 'employment,' for purposes of the Federal Insurance Contributions Act (FICA), as any service performed by an employee for the person employing the employee, with certain exceptions. Section 3306(c), relating to the Federal Unemployment Tax Act (FUTA), contains a similar definition.

  Sections 3121(b)(13) and 3306(c)(13) of the Code except from employment service performed as a student nurse in the employ of a hospital or a nurses' training school by an individual who is enrolled and is regularly attending classes in a nurses' training school chartered or approved pursuant to state law. Services performed by a student nurse in other capacities are not excepted from employment.

  In enacting the exception under section 3121(b)(13) of the Code, Congress stated that '(t)he intend of the amendment is to exclude those persons and those organizations in which the employment is part-time or intermittent and the total amount of earnings is only nominal, and the payment of the tax is inconsequential and a nuisance. The benefit rights built up are also inconsequential. Many of those affected, such as students...will have other employment which will enable them to develop insurance benefits,' H.R. Rep. No. 728, 76th Cong., 1st Sess. 18 (1939), 1939-2 C.B. 538, 543.

  The language of the statutes, including use of the phrase 'student nurse,' and the legislative history indicate Congress' intent to except services as a student nurse from the definition of employment only if the following three requirements are met:

  (1) The employment is substantially less than full-time,

  (2) The total amount of earnings is nominal, and

  (3) The only services performed by the student nurse for the employer are incidental parts of the student nurse's training toward a degree which will qualify him or her to practice as a nurse or in a specialized area of nursing.

  In this case, A works full-time, A's salary is not nominal, and the services performed by A are not part of A's training.

HOLDING

  The services of A for the hospital are not excepted from employment under sections 3121(b)(13) and 3306(c)(13) of the Code.

Rev. Rul. 85-74, 1985-1 C.B. 331, 1985-23 I.R.B. 18.