F1 resident alien: Option to pay FICA tax back for June 2020-Dec 2022

[BLR006]

I am on F1 visa since 2014. considered a resident alien for tax purposes since 2019. Stated work on OPT from June 2020 and FICA tax not withheld by the previous employer for June 2020-Dec 2022. Previous employer not willing to update W-2. 

1. Am i liable for full 15.3%, since previous employer did not pay? 
2. Can i use form 8919 and amend my tax return to pay FICA tax back for June 2020-Dec 2022?
3. is there installment plan avaliable to pay the FICA tax for June 2020-Dec 2022

[Anonymous_]

@pk ?

[pk]

@BLR006 , generally students with F-1 visa  and working on OPT, are still considered  in "training" and hence   exempt from FICA taxes .  Of course  this is valid as long as the entity & the work meets the requirements of  OPT.   I would generally assume  since the INS has approved your OPT extension to F-1, this entity and work must be a qualified  placement  and therefore you are exempt from  FICA.   The rules for this "exception" FICA, is  laid out  in Rev. Proc. 2005-11.  Generally what it means  is that either you are a  full or half time student while on OPT or you are not a "professional employee" then the exception is applicable.

Since you suspect that you are subject to FICA taxes , can you please tell me  (a) your student status; (b) the employer's association or otherwise to the School where you are enrolled; (c)  relationship with employer -- do you get all the benefits  ( vacation, sick leave, pension plan participation etc., etc that "employees" are eligible for  ); (d) are you a full-time or part-time employee. (e) etc. etc.

I will circle back once I hear from you .  BWT -- which country are you from   ( in case treaty conditions/ assertions apply ) ?

pk

[BLR006]

Hello @pk ,

a) graduated in may 2020. Not a full time student

b) The employer is not associated with the school. They are local public health department.

c) I did get some  benefits. No retirement. Did get vacation, sick leave.

d) was full time employee . Not permanent employee, since I was under a contract. Also, was not eligible for permanent employee since i was on F1 visa and not US citizen.

E) From India. Came to US in 2014 on f1 visa did bachelors, f1 visa renewed in 2019, did masters and graduated in 2020. I was working part time in school and had full course study, so I was FICA exempt then. 
F) OPT started in June 2020. STEM-OPT started in June 2021.

G) I keep reading about substantial presence test on IRS website, that’s I why I think I am not FICA exempt anymore. Thanks

[pk]

@BLR006 , since you entered the USA in 2014, your exempt  ( from counting days present ) period ended in 2019 . Thus from Jan 1st 2020 your presence in the USA counted for purposes of Substantial Presence Test  ( 183 days   counting all days in current year, 1/3 the days present  the year before  and 1/6th the days present  the year before that) and so you became  Resident for Tax Purposes in the middle of 2020.

Many states have their own version of FICA and are actually exempt from collecting / contributing / participating in the FICA scheme and therefore I do not believe  your  old "practical training" employer would help with FICA -- also that implies that you as an employee of that state / local govt. entity is  immune from participation of FICA.  Please talk to your old employer  to make sure that is the case.

Also note that being a resident for tax purposes has nothing to do  with FICA -- it is question of  whether  you are participating in a required/optional training rather that being a professional employee.

In my view  ( especially if the old employer  was in a state that does not participate in the FICA scheme), it is better to leave  things alone and proceed with the current employer / trainer  on FICA.  This is especially true , if you are not going to stay in the USA past your STEM-OPT period --- because the only gain is in Social Security credits and for this one or two years would not change anything.

Does this make sense  or am I in the left field ?

Is there more I can do for you ?

Namaste ji

pk

[BLR006]

The local gov employer is in Arizona, if that helps?

I spoke with my previous local gov employer and they said they did not withhold FICA , since I was on OPT and on F1 visa. They seemed to elude that substantial presence test is not relevant to them and it’s up to me on what I put in my annual return. So, that’s why I gave up on pursuing help from employer and trying to figure out should I pay or not pay.

also, I am planning to stay in the US for long term. And , don’t want this issue to affect future prospects. 

plus, check out https://studyinthestates.dhs.gov/stem-opt-hub/stem-opt-frequently-asked-questions  Here , they mention FICA needs be withheld for STEM-OPT if they are over 5 calendar years. This issue is confusing so I am trying to get an understanding and appreciate your suggestions.

[BLR006]

Looks like the link was not working , here it is https://studyinthestates.dhs.gov/stem-opt-hub/stem-opt-frequently-asked-questions 

[pk]

@BLR006 , thank you for that link to DHS pronouncements  in that the sole determinant  of being subject to FICA is  whether one has passed SPT ( Substantial Presence  Test or not  ). But this is in conflict with   Rev. Proc. 2005-11 which uses  "student characteristics " to declare whether one is  subject of excepted from FICA.   To add to the  confusion  DHS appears to class OPT as trainee while  STEM-OPT is more of an employee and sometime trainee.

Rev. Proc. 2005-11  does distinguish between "professiona employee" i.e. employees with  benefits  and therefore in my opinion:

(a) you should ignore  the FICA question for the first OPT  --

(b) for STEM-OPT, since you are getting some of the employee benefits , consider yourself  an employee  and become subject to FICA.  If your employer participates , that is great ( your will only pay only 7.65 towards FICA, else  for your 2022 return you fill out a schedule -SE and this will allow you to pay the full 15.3%  to IRS to be transferred to SSA.

(c) I would suggest you visit the local SSA office  and  tell them your issue and they should be able to help guide you -- in the end it SSA whom determines  and collects / distributes the benefits.

AS you say there being a strong possibility for you to be an immigrant, this should not  create any issues  -- because  IRS is only a pass through for the FICA taxes , DHS has no locus standi on this particiaption and this has nothing to do with immigration.

Is there more I can do for you ?

Namaste

pk

[BLR006]

No further questions. Thanks @pk