---
kind: "section"
citation: "26 U.S.C. § 3509"
title: "26"
title_heading: "Internal Revenue Code"
number: "3509"
heading: "Determination of employer’s liability for certain employment taxes"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/3509"
units:
  - "Subtitle C — Employment Taxes"
  - "Chapter 25 — General Provisions Relating to Employment Taxes"
---

# §3509. Determination of employer’s liability for certain employment taxes

- (a) **In general—** If any [employer](/usc/26/3231.md?p=a) fails to deduct and withhold any tax under [chapter 24](/usc/26/chstC/ch24.md) or subchapter A of [chapter 21](/usc/26/chstC/ch21.md) with respect to any [employee](/usc/26/3121.md?p=d) by reason of treating such [employee](/usc/26/3121.md?p=d) as not being an [employee](/usc/26/3121.md?p=d) for purposes of such chapter or subchapter, the amount of the [employer](/usc/26/3231.md?p=a)’s liability for—
  - (1) **Withholding taxes—** Tax under [chapter 24](/usc/26/chstC/ch24.md) for such year with respect to such [employee](/usc/26/3121.md?p=d) shall be determined as if the amount required to be deducted and withheld were equal to 1.5 percent of the [wages](/usc/26/3121.md?p=a) (as defined in [section 3401](/usc/26/3401.md)) paid to such [employee](/usc/26/3121.md?p=d).
  - (2) **Employee social security tax—** Taxes under subchapter A of [chapter 21](/usc/26/chstC/ch21.md) with respect to such [employee](/usc/26/3121.md?p=d) shall be determined as if the taxes imposed under such subchapter were 20 percent of the amount imposed under such subchapter without regard to this subparagraph.
- (b) **Employer’s liability increased where employer disregards reporting requirements—**
  - (1) **In general—** In the case of an [employer](/usc/26/3231.md?p=a) who fails to meet the applicable requirements of section [6041(a)](/usc/26/6041.md?p=a), [6041A](/usc/26/6041A.md), or [6051](/usc/26/6051.md) with respect to any [employee](/usc/26/3121.md?p=d), unless such failure is due to reasonable cause and not willful neglect, [subsection (a)](#a) shall be applied with respect to such [employee](/usc/26/3121.md?p=d)—
    - (A) by substituting “3 percent” for “1.5 percent” in [paragraph (1)](#b-1); and
    - (B) by substituting “40 percent” for “20 percent” in [paragraph (2)](#b-2).
  - (2) **Applicable requirements—** For purposes of [paragraph (1)](#b-1), the term “applicable requirements” means the requirements described in [paragraph (1)](#b-1) which would be applicable consistent with the [employer](/usc/26/3231.md?p=a)’s treatment of the [employee](/usc/26/3121.md?p=d) as not being an [employee](/usc/26/3121.md?p=d) for purposes of [chapter 24](/usc/26/chstC/ch24.md) or subchapter A of chapter 21.
- (c) **Section not to apply in cases of intentional dis­regard—** This section shall not apply to the determination of the [employer](/usc/26/3231.md?p=a)’s liability for tax under [chapter 24](/usc/26/chstC/ch24.md) or subchapter A of [chapter 21](/usc/26/chstC/ch21.md) if such liability is due to the [employer](/usc/26/3231.md?p=a)’s intentional disregard of the requirement to deduct and withhold such tax.
- (d) **Special rules—** For purposes of this section—
  - (1) **Determination of liability—** If the amount of any liability for tax is determined under this section—
    - (A) the [employee](/usc/26/3121.md?p=d)’s liability for tax shall not be affected by the assessment or collection of the tax so determined,
    - (B) the [employer](/usc/26/3231.md?p=a) shall not be entitled to recover from the [employee](/usc/26/3121.md?p=d) any tax so determined, and
    - (C) [section 3402(d)](/usc/26/3402.md?p=d) and [section 6521](/usc/26/6521.md) shall not apply.
  - (2) **Section not to apply where employer deducts wage but not social security taxes—** This section shall not apply to any [employer](/usc/26/3231.md?p=a) with respect to any [wages](/usc/26/3121.md?p=a) if—
    - (A) the [employer](/usc/26/3231.md?p=a) deducted and withheld any amount of the tax imposed by [chapter 24](/usc/26/chstC/ch24.md) on such [wages](/usc/26/3121.md?p=a), but
    - (B) failed to deduct and withhold the amount of the tax imposed by subchapter A of [chapter 21](/usc/26/chstC/ch21.md) with respect to such [wages](/usc/26/3121.md?p=a).
  - (3) **Section not to apply to certain statutory employees—** This section shall not apply to any tax under subchapter A of [chapter 21](/usc/26/chstC/ch21.md) with respect to an individual described in [subsection (d)(3)](/usc/26/3121.md?p=d-3) of section 3121 (without regard to whether such individual is described in paragraph [(1)](#d-1) or [(2)](#d-2) of such subsection).

## Source credit

(Added Pub. L. 97–248, title II, § 270(a), Sept. 3, 1982, 96 Stat. 553; amended Pub. L. 100–647, title II, § 2003(d), Nov. 10, 1988, 102 Stat. 3598; Pub. L. 101–508, title V, § 5130(a)(4), Nov. 5, 1990, 104 Stat. 1388–289; Pub. L. 115–141, div. U, title IV, § 401(a)(218), Mar. 23, 2018, 132 Stat. 1194.)

## Notes

### Editorial Notes

### Amendments

2018—Subsec. (d)(1)(C). Pub. L. 115–141 substituted “section 3402(d)” for “sections 3402(d)”.

1990—Subsec. (d)(3). Pub. L. 101–508 substituted “subsection (d)(3)” for “subsection (d)(4)”.

1988—Subsec. (d)(3). Pub. L. 100–647 substituted “subsection (d)(4)” for “subsection (d)(3)”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1990 Amendment

Amendment by Pub. L. 101–508 effective as if included in the enactment of Pub. L. 100–647, § 2003(d), see section 5130(b) of Pub. L. 101–508, set out as a note under section 1402 of this title.

### Effective Date

Pub. L. 97–248, title II, § 270(c), Sept. 3, 1982, 96 Stat. 554, provided that: “The amendment made by this section [enacting this section] shall take effect on the date of the enactment of this Act [Sept. 3, 1982], except that such amendments shall not apply to any assessment made before January 1, 1983.”