Rev. Rul. 55-631

Advice has been requested whether the value of living quarters and meals furnished to various non-student individuals, who perform services of a household nature in a local chapter house of a college fraternity, should be considered in computing wages for purposes of the taxes imposed under the Federal Insurance Contributions Act (subchapter A, chapter 9, Internal Revenue Code of 1939.)

In the instant case the local chapter of a college fraternity, exempt from Federal income tax under section 101 of the Internal Revenue Code of 1939, employs various non-student individuals to perform services in the chapter house as cooks, waiters, cleaners and a housemother. In addition to cash remuneration, a number of them are furnished living quarters and meals in payment for services rendered. Since section 1426(a)(7)(A) of the Federal Insurance Contributions Act excepts from `wages' remuneration paid in any medium other than cash to employees for domestic service in a private home of the employer, the question has been presented whether such exception also applies to the same type of service performed in or about a local chapter house of a college fraternity.

The exception of remuneration paid in any medium other than cash for domestic service provided by section 1426(a)(7)(A) of the Act is applicable only to such services when performed in a private home of the employer. See Rev. Rul. 55-630, page 616.

Section 1426(b)(11)(A) excepts from the term `employment' service performed in any calendar quarter in the employ of any organization exempt from income tax under section 101, if the remuneration for such service is less than $50.

Section 1426(b)(11)(A), applicable to services performed for section 101 organizations, does not except from `wages' remuneration paid in any medium other than cash. Therefore, the value of living quarters and meals furnished to non-student individuals who perform services of a household nature in a local chapter house of a college fraternity, which is exempt from Federal income tax under section 101 of the Internal Revenue Code of 1939, constitutes `wages' for Federal Insurance Contributions Act purposes, and should be included in determining the $50 wage limitation prescribed by section 1426(b)(11)(A) of the Act