STEM OPT - FICA taxes?

[j199]

Hello,

I'm on F1 visa since 2014, currently on STEM-OPT (USCIS approved employment).

As I prepare my taxes, I'm confused if my employer should be deducting FICA taxes from my wage or not. I've been in the US for more than 5 calendar years. 

From the IRS website:

"This exemption also applies to any period in which the foreign student is in practical training allowed by USCIS, as long as the foreign student is still a NONRESIDENT ALIEN under the Internal Revenue Code. Foreign students in F-1, J-1, M-1, Q-1 or Q-2 nonimmigrant status who have been in the United States more than 5 calendar years are RESIDENT ALIENS and are liable for social security/Medicare taxes (unless they are exempt from FICA under the "student FICA exemption"(...)"

According to the Substantial Test page, 

"A  student temporarily present in the U.S. under an "F," "J," "M," or "Q" visa, who substantially complies with the requirements of the visa" is an exempt individual.

In Publication 519, they state:

"You will not be an exempt individual as a student in 2018 if you have been exempt as a teacher, trainee, or student for any part of more than 5 calendar years unless you meet both of the following requirements.

• You establish that you do not intend to reside permanently in the United States.

• You have substantially complied with the requirements of your visa."

Should I be paying FICA taxes? I have complied with the requirements of my visa and have not taken any steps towards becoming a permanent resident. Thanks!

[LinaJ2020]

You should pay FICA taxes for the year 2019. 

As an F-1 visa holder, you are exempt from FICA taxes up to five years you were present in the US.  Therefore, you do not pay FICA taxes from the year 2014-2018.

For the year 2019, if you were present in the US for more than 183 days, you are considered as a US resident for tax purposes.  Even you are still on an F-visa, you are no longer a nonresident anymore.  Therefore, you would need to start paying FICA taxes. See the IRS source:

From the IRS website:

"This exemption also applies to any period in which the foreign student is in practical training allowed by USCIS, as long as the foreign student is still a NONRESIDENT ALIEN under the Internal Revenue Code. Foreign students in F-1, J-1, M-1, Q-1 or Q-2 nonimmigrant status who have been in the United States more than 5 calendar years are RESIDENT ALIENS and are liable for social security/Medicare taxes (unless they are exempt from FICA under the "student FICA exemption"(...)"

I hope this clarifies the confusion.  

[prtk05]

Hi Lina,

I think I am in the same boat as the original poster.  Can you please clarify exactly how the 2019 FICA tax payments can be made now? Which IRS form should I use?

Thanks.

[LinaJ2020]

If your employer did not withhold any FICA taxes on your Form W-2 or other tax documents, I will suggest you communicate with your employer to resolve the issues.  Employers who do not comply with the employment tax laws may be subject to criminal and civil sanctions for willfully failing to pay employment taxes. For now, you will still file your 2019 tax return as usual.  If things need to be changed on the tax documents, you can always amend later.  I am attaching the following links for your references:

FICA withholding

Employer vs Employee responsibilities

@prtk05

[prtk05]

@LinaJ2020  thanks for the reply. 

Are you saying I should file my return as is? Is there a way I can pay the remaining amount of FICA tax with my return (just like when federal taxes are owed)? I should also note that my status changed to H1b on Oct 2019, so I paid FICA taxes from Oct-Dec 2019.

I have tried contacting my employer, but they are trying to push this back on me.

Thanks.

[KarenJ2]

You may qualify for the Student FICA Exception (see below) before you received your H1b visa..  If not, FICA issues are between you and your employer.

Student FICA Exception

[LinaJ2020]

If your employer refused to cooperate, I would suggest you contact the IRS at 800-829-1040 and you should also complete and attach a Form 4852, Substitute for W-2, to your tax return using the best information available to calculate the wages and the withholding. This information can often be secured from pay stubs. 

To see how you enter in the TurboTax program, click here for instructions Substitute W-2.   

Employees who do not have taxes withheld nor remit them personally, are still liable for these taxes and may not qualify for Social Security, Medicare, or unemployment benefits.  In addition, if the employer refuses to withhold employment taxes from these wages and the IRS is unable to collect the employment taxes from the employer, the employee still has the responsibility to pay income tax and is ultimately responsible for his/her share of the FICA tax.

@j199 @prtk05

For more information from the IRS, please click here: Responsibilities

[LinaJ2020]

Please see my answer above.  You are not subject to FICA while on the F-1 visa before October 2019.  Request your employer to withhold FICA taxes from October to December 2019 and continue on. 

Also, note that your employer may be subject to criminal and civil sanctions for willfully failing to pay employment taxes.  For more information from the IRS, please click here: Responsibilities

@prtk05

[prtk05]

@LinaJ2020  I am confused- why do I jot have to pay FICA from Jan-Sep 2019? Even though I do not qualify for the FICA student exception?

And my employer finally has agreed to cooperate.

FYI- I came to the USA on 2014 on an F1 Visa. 

[LinaJ2020]

Thank you for your reminder:  "FYI- I came to the USA on 2014 on an F1 Visa." 

My bet.  I reviewed your original post and noticed I made a mistake in my previous answer.  

You are correct that you are subject to FICA from January 1st to December 2019.  Since you started your F-visa in 2014, you are exempt from FICA for five years ( 2014-2018). You will need to pay FICA for the entire year 2019.  Great to hear your employer is willing to work with you on correcting the FICA withholding.  

Sorry for the confusion. 

@prtk05

[prtk05]

@LinaJ2020  No worries! Thanks for getting back to me with the clarification. 

[LinaJ2020]

You are welcome!

[prtk05]

Hi @LinaJ2020, I finally received the W2-c (only shows the corrections) from my employer. Can I finish filing my return now? Also, since I am doing it online, do I have to enter the new data as a new W2 in addition to the old W2? Or just correct the amounts shown in the original W2? (Which is to say I CAN file online, right?)

Appreciate your help.

[LinaJ2020]

You can still file online.  You would only enter the information from W-2C.  To avoid duplicate, you do not enter both of them.  

@prtk05

[prtk05]

Thanks @LinaJ2020- I meant to say that my W2C only shows the corrected amounts and leaves the rest of the fields blank (like my federal taxes for which there was no change). My understanding is that on the income section, I will only put the correct amounts per both W2 and W2c, and upload both W2 and W2c. Am I correct?