Medical residents must pay payroll tax

Medical residents already scraping the bottom of the barrel to pay bills will receive no benefit from the newly-instituted payroll tax reduction, according to UPI. In fact, any previous leniency they received in payroll tax exemption was nullified by a recent U.S. Supreme Court ruling.

The bench decided that residents are subject to payroll taxes, despite a previous ruling from the Minnesota Federal Court that said such individuals were exempt from the tax. That is unwelcome news for residents who already operate under time constricting schedules, including on-site training and educational activities.

Mayo Clinic and University of Minnesota representatives first levied the case, charging that residents were not inclusive under the Federal Insurance Contributions Act. After initial support from the Minnesota federal bench, an appeals court overturned the decision.

"We do not doubt that Mayo's residents are engaged in a valuable educational pursuit or that they are students of their craft," Chief Justice John Roberts wrote in the unanimous opinion. "The question whether they are 'students' for purposes of the federal statute however … the judgment of the court of appeals must be affirmed."

Mayo Clinic residents are offered a $40,000 stipend, plus health insurance, malpractice insurance and vacation time, according to UPI.

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