The Supreme Court unanimously ruled that medical residents should be considered employees when it comes to gathering their Social Security taxes, the AP reports, upholding an Internal Revenue Service rule that they fall outside of exemptions for student employees.

The court said Tuesday the IRS did not have to relinquish tax money collected by the Mayo Foundation in Rochester, Minn. and the University of Minnesota, the AP said.

The Mayo Foundation was disputing a 2005 IRS rule that barred residents working more than 40 hours a week from claiming student exemptions to the tax. Previously, the IRS examined residents' eligibility for exemptions on a case-by-case basis.
The amount of Social Security tax levied on medical residents is estimated to reach $700 million, according to reports.

The courts have generally sided with teaching hospitals when they have litigated on the issue of residents being considered students, the American Hospital Association said in friend-of-the-court briefs filed in support of Mayo's position in August.

The AHA also said letting the IRS rules stand would divert already "scarce resources of our country's teaching hospitals and medical schools from their crucial missions of patient care, physician training, and medical research."

The high court first heard the case, Mayo Foundation for Medical Education and Research v. the United States, in June.

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