DESCRIPTION OF AN AMENDMENT
IN THE NATURE OF A SUBSTITUTE
TO THE PROVISIONS IN H.R. 4738




Scheduled for a Markup by the

HOUSE COMMITTEE ON WAYS AND MEANS

On

October 9, 1998




Prepared by the Staff

of the

JOINT COMMITTEE ON TAXATION




October 9, 1998




JCX-69-98


DESCRIPTION OF AN AMENDMENT IN THE NATURE OF A SUBSTITUTE TO THE PROVISIONS IN H.R. 4738

On October 9, 1998, the House Committee on Ways and Means has scheduled a markup of the provisions contained in H.R. 4738. A description of these provisions are contained in JCX-66-98 and JCX-67-98. The amendment in the nature of a substitute would adopt the provisions of H.R. 4738, with the following additional provision:(1)

State Election to Exempt Student Employees From Social Security

Present Law

The Social Security Amendments of 1972 provided an opportunity for States to obtain exemptions from Social Security coverage for student employees of public schools, colleges, and universities. States choosing to opt out had to do so prior to January 1, 1974. Most States did. Student employees in these States do not have to pay FICA taxes on their wages, allowing them to keep more of their earnings.

Description of Proposal

The proposal would allow a limited window of time (January 1 through March 31, 1999) for States to modify existing State agreements to exempt students (including graduate assistants) from Social Security coverage who are employed by a public school, university, or college in a nonexempted State.


1. This document may be cited as follows: Joint Committee on Taxation, Description of an Amendment in the Nature of a Substitute to the Provisions in H.R. 4738 (JCX-69-98), October 9, 1998.