1304.Pay for Work for Nonprofit Organization

1304.1What is the minimum pay test for work for a nonprofit organization?

If you work for a nonprofit organization that does not have to pay Federal income tax under section 501(a) of the Internal Revenue Code (IRC), your earnings are subject to a minimum pay test. Beginning in 1978, as an employee of such an organization, you must be paid at least $100 in a calendar year in order for the payments to count as wages. (Before 1978, such employment was covered only if wages of at least $50 were earned in a calendar quarter.)

1304.2How is your payment credited if you meet the minimum pay test?

If you meet the minimum pay test, your payment can be credited for Social Security purposes. If you are an employee of an exempt organization that is a religious, charitable, educational, etc. organization, your payment is covered beginning January 1, 1984. (See §931 for special rules for church or qualified church-controlled organizations.) Your pay may be either cash pay, payments-in-kind, or both.

Before 1984, payment could be credited only if the organization filed an appropriate waiver certificate for its covered employees. (See §931.)

1304.3How is your payment credited if you do NOT meet the minimum pay test?

If your pay is less than the minimum pay in cash or payments-in-kind during the calendar year, your payment is not counted for Social Security purposes. However, it is still counted for the earnings test. (See Chapter 18.)