Medical residents are students of medicine. Medical residents are physicians in training. Is it one or the other, or both? For the purposes of the plaintiffs, the University of Minnesota will take up the issue of whether Social Security taxation applies to them before the U.S. Supreme Court. Thanks to a joint filing from the Mayo Foundation for Medical Education and the U of M, the SCOTUS will hear the case — whose bases stretch back some twenty years.

At issue: the potential for upwards of $700M or more yearly in income that would be gained in the U’s budget (and in training programs nationwide) if an exemption on residents is granted with respect to Social Security taxes. The Treasury Dept., which houses the Internal Revenue Service, currently taxes resdients’ incomes; the Internal Revenue Service asserts that doctors in training, and the teaching hospitals that train them, must pay Social Security taxes on the residents’ stipends (incomes).

Residents are taxed at 7.5 percent — as they are considered employees of their training program. Oral arguments could begin in as little as six months. President Obama’s current nominee, Elena Kagan, would not take part in such deliberations because she is part of a brief supporting the federal government’s stance. | LINK

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