An individual who is not a citizen of the United States but who is a resident of the Commonwealth of Puerto Rico, the Virgin Islands, Guam, or American Samoa shall not, for the purposes of this subsection, be considered to be a nonresident alien individual.178

Trade or Business

(c) The term "trade or business", when used with reference to selfemployment income or net earnings from self-employment, shall have the same meaning as when used in section 162 of the Internal Revenue Code of 1954,174 except that such term shall not include—

(1) The performance of the functions of a public office;

(2) The performance of service by an individual as an employee, other than

(A) service described in section 210 (a) (14) (B) performed by an individual who has attained the age of eighteen,

(B) service described in section 210 (a) (16),

(C) service described in section 210 (a) (11), (12), or (15) performed in the United States by a citizen of the United States, and

(D) service described in paragraph (4) of this subsection; 175

(3) The performance of service by an individual as an employee or employee representative as defined in section 3231 of the Internal Revenue Code of 1954; 176

(4) The performance of service by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order; or

(5) The performance of service by an individual in the exercise of his profession as a doctor of medicine or Christian Science practitioner; or the performance of such service by a partnership. The provisions of paragraph (4) shall not apply to service (other than service performed by a member of a religious order who has taken a vow of poverty as a member of such order) performed by an individual during the period for which a certificate filed by such individual under section 1402 (e) of the Internal Revenue Code of 1954 177 is in effect. The provisions of paragraph (5) shall not apply to service performed by an individual in the exercise of his profession

173 P. L. 86-778, sec. 103 (h) substituted the present last sentence of sec. 211 (b) for the following: "In the case of any taxable year beginning prior to the effective date specified in section 219, an individual who is a citizen of Puerto Rico (but not otherwise a citizen of the United States) and who is not a resident of the United States during such taxable year shall be considered, for the purposes of this subsection as a nonresident alien individual. An individual who is not a citizen of the United States but who is a resident of the Virgin Islands or (after the effective date specified in section 219) a resident of Puerto Rico shall not, for the purposes of this subsection, be considered to be a nonresident alien individual." This amendment is applicable only in the case of taxable years beginning after 1960. See also sec. 103 (v) (3) of P. L. 86-778, on p. 224.

174 See p. 312.

175 P. L. 86-778, sec. 106 (a), amended sec. 211 (c) (2) by reorganizing the material formerly in par. (2) into the present subpar. (A), (B), and (D) without substantive change, and by adding the material in subpar. (C). This amendment is applicable only with respect to taxable years ending on or after December 31, 1960; except that for purposes of sec. 203 of the Social Security Act, it applies only with respect to taxable years (of the individual performing the service involved) beginning after September 13, 1960.

176 See p. 355.

177 See p. 329.

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as a Christian Science practitioner during the period for which a certificate filed by him under section 1402 (e) of the Internal Revenue Code of 1954 is in effect.

Partnership and Partner

(d) The term "partnership" and the term "partner" shall have the same meaning as when used in subchapter K of chapter 1 of the Internal Revenue Code of 1954.178

Taxable Year

(e) The term "taxable year" shall have the same meaning as when used in subtitle A of the Internal Revenue Code of 1954; 179 and the taxable year of any individual shall be a calendar year unless he has a different taxable year for the purposes of subtitle A of such code, in which case his taxable year for the purposes of this title shall be the same as his taxable year under such subtitle A.

Partner's Taxable Year Ending as Result of Death

(f) In computing a partner's net earnings from self-employment for his taxable year which ends as a result of his death (but only if such taxable year ends within, and not with, the taxable year of the partnership), there shall be included so much of the deceased partner's distributive share of the partnership's ordinary income or loss for the partnership taxable year as is not attributable to an interest in the partnership during any period beginning on or after the first day of the first calendar month following the month in which such partner died. For purposes of this subsection

(1) in determining the portion of the distributive share which is attributable to any period specified in the preceding sentence, the ordinary income or loss of the partnership shall be treated as having been realized or sustained ratably over the partnership taxable year; and

(2) the term "deceased partner's distributive share" includes the share of his estate or of any other person succeeding, by reason of his death, to rights with respect to his partnership interest.

Crediting of Self-Employment Income to Calendar Quarters Sec. 212. For the purposes of determining average monthly wage and quarters of coverage the amount of self-employment income derived during any taxable year shall be credited to calendar quarters as follows:

(a) In the case of a taxable year which is a calendar year the self-employment income of such taxable year shall be credited equally to each quarter of such calendar year.

(b) In the case of any other taxable year the self-employment income shall be credited equally to the calendar quarter in which

178 See p. 319.

179 See p. 315.

180 Sec. 313 (a) of P. L. 85-840 added subsec. (f) effective (1) with respect to individuals who die after August 28, 1958, and (2) with respect to any individual who died after 1955 and on or before August 28, 1958, but only if the requirement of sec. 403 (b) (2) of P. L. 85-840 (see p. 219) are met.

such taxable year ends and to each of the next three or fewer preceding quarters any part of which is in such taxable year.

Quarter and Quarter of Coverage

Definitions

Sec. 213. (a) For the purpose of this title

(1) The term "quarter", and the term "calendar quarter", means a period of three calendar months ending on March 31, June 30, September 30, or December 31.

(2) The term "quarter of coverage" means a quarter in which the individual has been paid $50 or more in wages (except wages for agricultural labor paid after 1954) or for which he has been credited (as determined under section 212) with $100 or more of self-employment income, except that—

(i) no quarter after the quarter in which such individual died shall be a quarter of coverage, and no quarter any part of which was included in a period of disability (other than the initial quarter and the last quarter of such period) shall be a quarter of coverage;

181

(ii) if the wages paid to any individual in any calendar year equal $3,000 in the case of a calendar year before 1951, or $3,600 in the case of a calendar year after 1950 and before 1955, or $4,200 in the case of a calendar year after 1954 and before 1959, or $4,800 in the case of a calendar year after 1958, each quarter of such year shall (subject to clause (i)) be a quarter of coverage;

(iii) if an individual has self-employment income for a taxable year, and if the sum of such income and the wages paid to him during such year equals $3,600 in the case of a taxable year beginning after 1950 and ending before 1955, or $4,200 in the case of a taxable year ending after 1954 and before 1959, or $4,800 in the case of a taxable year ending after 1958, each quarter any part of which falls in such year shall (subject to clause (i)) be a quarter of coverage;

(iv) if an individual is paid wages for agricultural labor in a calendar year after 1954, then, subject to clause (i), (a) the last quarter of such year which can be but is not otherwise a quarter of coverage shall be a quarter of coverage if such wages equal or exceed $100 but 114 are less than $200; (b) the last two quarters of such year which can be but are not otherwise quarters of coverage shall be quarters of coverage if such wages equal or exceed $200 but are less than $300; (c) the last three quarters of such year which can be but are not otherwise quarters of coverage shall be quarters of coverage if such wages equal or exceed $300 but are less than $400; and (d) each quarter of such year which is not otherwise a quarter of coverage shall be a quarter of coverage if such wages are $400 or more; and

which an individual was paid a quarter of coverage, of the This amendment is applicable

181 P. L. 86-778, sec. 206 (a) amended sec. 213 (a) (2) by changing the method of crediting quarters of coverage for years prior to 1951 in $3,000 or more wages and by permitting the crediting, as last quarter of a period of disability ending prior to 1951. as indicated in sec. 206 (b) of P. L. 86-778, see p. 226. read prior to this amendment, see p. 297.

For sec. 213 (a) (2) as it

(v) no quarter shall be counted as a quarter of coverage prior to the beginning of such quarter.

If, in the case of any individual who has attained retirement age or died or is under a disability and who has been paid wages for agricultural labor in a calendar year after 1954, the requirements for insured status in subsection (a) or (b) of section 214, the requirements for entitlement to a computation or recomputation of his primary insurance amount, or the requirements of paragraph (3) of section 216 (i) are not met after assignment of quarters of coverage to quarters in such year as provided in clause (iv) of the preceding sentence, but would be met if such quarters of coverage were assigned to different quarters in such year, then such quarters of coverage shall instead be assigned, for purposes only of determining compliance with such requirements, to such different quarters. If, in the case of an individual who did not die prior to January 1, 1955, and who attained retirement age or died before July 1, 1957, the requirements for insured status in section 214 (a) (3) 182 are not met because of his having too few quarters of coverage but would be met if his quarters of coverage in the first calendar year in which he had any covered employment had been determined on the basis of the period during which wages were earned rather than on the basis of the period during which wages were paid (any such wages paid that are reallocated on an earned basis shall not be used in determining quarters of coverage for subsequent calendar years), then upon application filed by the individual or his survivors and satisfactory proof of his record of wages earned being furnished by such individual or his survivors, the quarters of coverage in such calendar year may be determined on the basis of the periods during which wages were earned.183

Crediting of Wages Paid in 1937

(b) With respect to wages paid to an individual in the six-month periods commencing either January 1, 1937, or July 1, 1937; (A) if wages of not less than $100 were paid in any such period, one-half of the total amount thereof shall be deemed to have been paid in each of the calendar quarters in such period; and (B) if wages of less than $100 were paid in any such period, the total amount thereof shall be deemed to have been paid in the latter quarter of such period, except that if in any such period, the individual attained age sixty-five, all of the wages paid in such period shall be deemed to have been paid before such age was attained.

Insured Status for Purposes of Old-Age and Survivors Insurance Benefits

Sec. 214. For the purposes of this title-

182 This reference is to sec. 214 (a) (3) as in effect prior to the amendments made by P. L. 86-778 (see p. 299).

183 P. L. 86-442, sec. (3), enacted April 22, 1960, added the last sentence of sec._213 (a) (2) applicable in the case of monthly benefits under title II for months after June 1957, and in the case of the lump-sum death payments under such title, with respect to deaths occurring after such month. The requirements for filing applications for such benefits and payments within the time limits prescribed in sec. 202 (i) and sec. 202 (j) of title II shall not apply if an application is filed within the one-year period beginning with the first day of May 1960.

Fully Insured Individual

(a) The term "fully insured individual” means any individual who had not less than

(1) one quarter of coverage (whenever acquired) for each three of the quarters elapsing

(A) after (i) December 31, 1950, or (ii) if later, December 31 of the year in which he attained the age of twenty-one, and

(B) prior to (i) the year in which he died, or (ii) if earlier, the year in which he attained retirement age, except that in no case shall an individual be a fully insured individual unless he has at least six quarters of coverage; or

(2) forty quarters of coverage; or

(3) in the case of an individual who died prior to 1951, six quarters of coverage;

not counting as an elapsed quarter for purposes of paragraph (1) any quarter any part of which was included in a period of disability (as defined in section 216(i)) unless such quarter was a quarter of coverage. When the number of elapsed quarters referred to in paragraph (1) is not a multiple of three, such number shall, for purposes of such paragraph, be reduced to the next lower multiple of three.184

Currently Insured Individual

(b) The term "currently insured individual” means any individual who has not less than six quarters of coverage during the thirteenquarter period ending with (1) the quarter in which he died, (2) the quarter in which he became entitled to old-age insurance benefits, (3) the quarter in which he became entitled to primary insurance benefits under this title as in effect prior to the enactment of this section, or (4) in the case of any individual entitled to disability insurance benefits, the quarter in which he most recently became entitled to disability insurance benefits, not counting as part of such thirteen-quarter period any quarter any part of which was included in a period of disability unless such quarter was a quarter of coverage.185

184 P. L. 86-778, sec. 204 (a), amended sec. 214 (a) in its entirety applicable (A) in the case of monthly benefits under title II for months after September 1960, on the basis of applications filed in or after such month, (B) in the case of lump-sum death payments under title II with respect to deaths occurring after such month, and (C) in the case of an application for a determination with respect to a period of disability (as defined in sec. 216 (i)) filed after such month. For sec. 214 (a) as it read prior to this amendment see p. 298.

Sec. 204 (b) of P. L. 86-778, provides as follows: "(b) The primary insurance amount (for purposes of title II of the Social Security Act) of any individual who died after 1939 and prior to 1951 shall be determined as provided in section 215 (a) (2) of such Act." Sec. 204 (d) (2) of P. L. 86-778, provides as follows: "(2) For the purposes of determining (A) entitlement to monthly benefits under title II of the Social Security Act for the month in which this Act is enacted and prior months with respect to the wages and self-employment income of an individual and (B) an individual's closing date prior to 1960 under section 215 (b) (3) (B) of the Social Security Act, the provisions of section 214 (a) of the Social Security Act in effect prior to the date of the enactment of this Act and the provisions of section 109 of the Social Security Amendments of 1954 in effect prior to such date shall apply." P. L. 86-778 was enacted on September 13, 1960.

185 For purposes of determining when a currently insured status exists in certain cases of husband's or widower's insurance benefits, see secs. 113 (c) and 113 (d) of the Social Security Amendments of 1954 (P. L. 761, 83d Cong.), p. 201.