Social Security and Medicare (FICA) Taxes for Non-resident Exempt Individual

Exempt from FICA taxes
Generally, services performed by you as a nonresident alien temporarily in the United States as a non-immigrant under (F), (J), (M), or (Q) of section 101(a)(15) of the Immigration and Nationality Act are not covered under the social security program if the services are performed to carry out the purpose for which you were admitted to the United States. This means that there will be no withholding of social security or Medicare taxes from the pay you receive for these services. These types of services are very limited, and generally include only on-campus work, practical training, and economic hardship employment.

If you are a nonresident alien temporarily admitted to the United States as a student, you generally are not permitted to work for a wage or salary or to engage in business while you are in the United States. In some cases, a student admitted to the United States in “F-1,” “M-1,” or “J-1” status is granted permission to work. Social security and Medicare taxes are not withheld from pay for the work unless the student is considered a resident alien.

Resident Aliens must pay FICA taxes
Social security and Medicare taxes will be withheld from your pay for these services if you are considered a resident alien, even though your non-immigrant classification (“F,” “J,” “M,” or “Q”) remains the same. Services performed by a spouse or minor child of nonimmigrant aliens with the classification of “F-2,” “J-2,” “M-2,” and “Q-3” are covered under social security.

File Form 843 to Get the Refund of FICA taxes withheld
In case an employer deducted FICA taxes from the wages of an F1 student, the student should write to the employer for the refund of the taxes. If the employer is unable to refund the taxes, then you must complete Form 843--Claim for Refund and Request for Abatement and file with Internal Revenue Service Center.
Where to File? This form is not filed with the tax return. It is filed separately with the Internal Revenue Service Center at the address where your employer's returns were filed. If you do not know where your employer's returns were filed, file Form 843 with the Internal Revenue Service Center, 11601 Roosevelt Blvd, DPE 351, Philadelphia, PA 19255.

The attachments to Forms 843 and 8316
Attach the following items to your Form 843:
1. A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld,
2. A copy of the page from your passport showing the visa stamp,
3. INS Form I-94,
4. If applicable INS Form I-538, Certification by Designated School Official,
5. A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim. If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer, and if applicable
6. Form 8316, Information Regarding Request for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, or M Type Visa

Calculating Income and FICA taxes During the OPT (or exempt) Period
In many cases a student on F1/OPT gets the visa status changed to H1-B. He is working for the same employer during H1-B for whom he/she was working during OPT. The employer withholds FICA taxes during OPT as well as during H1-B. And for the total wages paid during OPT and H1-B, employer issues only one W2.

Now to get refund of FICA taxes during OPT, on the Form 843, the taxpayer must use simple arithmetic to figure out his/her wages during OPT and FICA taxes paid on the OPT wages.

More Articles on Tax for Aliens
1. U.S. Tax Filing Requirements for Non-Residents
2. Substantial Presence Test
3. Social Security and Medicare (FICA) Taxes for Non-resident Exempt Individual
4. U.S. Tax Treaties for Professors, Teachers and Researchers
5. U.S. Tax Treaties for Students and Apprentices
6. The U.S. Visas
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