Tax status of medical residents.

Medical (and other health care) residency programs are a staple of education and training in the United States. Once a person has graduated from medical school and passed a licensing exam, he or she is eligible to participate in a program run by a sponsoring or participating institution as a resident, gaining needed experience before becoming fully licensed to practice medicine.

In general, the IRS (and the Social Security Administration (SSA)) has treated medical residents as employees, withholding Federal Insurance Contributions Act (FICA) taxes from their salaries. At the same time, however, the Internal Revenue Code includes an exception from FICA taxes for services …