By Gerald S. Deutsch, Esq.
Glen Head, NY
Jury duty pay is taxable income of course, but it is not "wages" for purposes of withholding nor is it subject to FICA or Medicare Tax. Additionally, jury duty pay is not subject to self-employment tax because jury duty is not considered being engaged in a trade or business. In IRS Publication 17, the IRS says that payment for jury duty should be reported on line 21 of Form 1040.
What is the impact of arrangements with a juror's regular employer? While only a few states require that employers pay an employee while serving as a juror, some employers do so even though not required. Some employers may pay the juror's pay in full and some pay the difference between the juror's regular pay and jury duty pay. Furthermore some employers pay the employee's full salary but require the juror to reimburse the employer for the jury duty pay received. When this is the case, the amount repaid to the employer may be deducted in arriving at adjusted gross income on line 36 of Form 1040 (per IRS Publication 17). This deduction is available even if the standard deduction is chosen and, if deductions are itemized, will not be subject to the 2% of adjusted gross income floor.
For more information, in the Tax Management Portfolios, see Maule, 501 T.M., Gross Income: Overview and Conceptual Aspects, and in Tax Practice Series, see ¶1110, Compensation in General.
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