Supreme Court

Supreme Court Upholds Tax on Medical Residents

by Joshua on January 11, 2011

In an unanimous decision, the Supreme Court upheld the requirement that medical residents pay Social Security taxes. As we noted in our prior posts on this topic, full-time students that work in addition to attending school are generally exempt from paying such taxes. However, in the Court’s opinion written by Chief Justice Roberts, the interpretation by the Internal Revenue Service of the law requiring residents to pay such tax was a reasonable one. The Court did not agree with Mayo Clinic’s argument that like full-time students, medical residents attend lectures and perform lab work in the course of learning and thus should not be responsible for paying the Social Security tax. The stakes in this case range from upwards of $700 Million payable by approximately 100,000 medical residents across the country.

Court Opinion

Wall Street Journal, Tax on Medical Residents Upheld by Court


According to the Associated Press, the Supreme Court will hear an appeal from the Eighth Circuit Court of Appeals on the issue of whether student doctors are students or employees when it comes to collecting Social Security taxes. The case on appeal is Mayo Foundation for Medical Education and Research v. United States, 568 F.3d 675 (8th Cir. 2009).  Argument is set to take place in fall or winter and Supreme Court nominee Elena Kagan would not take part in the case if confirmed because she signed the government’s brief defending the IRS’ position.

In a previous post, Medical Resident- A Somebody, Not “Student” Body under FERPA and FICA, I discussed the issues and case law surrounding medical residents and their status’ as students and employees under FERPA (Family Education Rights and Privacy Act) and FICA. Perhaps the Supreme Court’s ruling will provide public university administrators with some guidance on how to characterize residents for purposes of FERPA.


According to Bloomberg Businessweek, the United States Supreme Court will review the constitutionality of an Arizona tax credit for donations to organizations that provide scholarships at private schools. The case is Garriot v. Winn, 09-991:

The justices will review a federal appeals court decision that let a group of taxpayers press ahead with their challenge to the Arizona program, which has been in effect since 1997.

The taxpayers say the program uses religious organizations to award scholarships and lets those groups require that recipients enroll in sectarian schools.

Additional Coverage:

The Associated Press

Education Week News Blog


As noted by NPR, if Elena Kagan is confirmed to the Supreme Court each of the Justices will have attended law school at either Harvard or Yale. The article raises the question of whether attending an Ivy League school should be a prerequisite to becoming a Justice on the Supreme Court:

“It really represents an unstated but quite powerful consensus that there is a narrow channel through which you have to pass to be a Supreme Court justice,” Lemann says. [Nicholas] Lemann says that the Kagan nomination points to a growing lack of diversity when it comes to background and experience. “If they haven’t done certain things by the time they are 25 or 30 — game over,” Lemann says.

Click here to listen a discussion of this topic on NPR’s Weekend Edition Sunday program.

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