Do non-residents have to pay fica tax

[chrisbeef]

Hi,

My wife is on a L2 visa. She was self employed in 2022. She only earned $4200. She made no fica tax estimates as we didn't know she had to.

Sprintax said she owes a certain amount of federal tax but didn't mention fica tax. When we asked their support they said she didn't have to pay it - I just wanted to confirm that was true?

Thanks,
Chris

[MinhT1]

Non resident aliens are not subject to self-employment tax.

Please read this IRS document for more information.

[chrisbeef]

Hi,

As we live in the US I was wondering about the second part:

However, self-employment income you receive while you are a U.S. resident is subject to self-employment tax even if it was paid for services you performed as a nonresident.

Which she received while living here as non-resident?

[MinhT1]

This means that once she becomes a resident for tax purposes, she will be subject to self-employment tax, even if this income is paid to her while she is resident but for services she performed while a nonresident alien.

For example, she becomes a resident alien on August 1, 2023. On August 15, she receives $2,000 of self-employed income for work she did in July 2023. That $2,000 will be subject to self-employment tax.

[chrisbeef]

Ah false alarm.... we went through the 1040-NR and in the print out it had actually calculated the self employment tax on the form itself - so sprintax does indeed calculate it!

[Sam Hopi]

@MinhT1 I have a question about this SE tax. If nonresident had self-employed tax i 2023 so should not pay SE tax but has to file Sch C. Let me know in what section on Sch C or SE tax form helps me to checkmark or something like that I am exempt from SE tax. 

Thanks for your help!

[Vanessa A]

No, if you are a non-resident alien you are not subject to SE tax.  If you are a Non-resident alien,  you will need to file a 1040-NR using Sprintax.com as TurboTax does not handle form 1040-NR.  

[Sam Hopi]

Thanks for your reply. 

But have to file Sch C when filed sch C then automatically SE tax appeared at this moment how can I exempt SE tax as non-resident, this my question.

[DavidD66]

Income and adjustments that cannot be entered directly on Form 1040-NR are reported on Schedule 1 of Form 1040.  For your Self-Employment, you should use Schedule C to to determine your "effectively connected income and expenses" and report this amount on line 3 of Schedule 1 (Form 1040).  This amount is then reported on line 10 of Form 1040-NR.  If your are not subject to self-employment tax, you do not need to file Form SE.   @Sam Hopi 

[Sam Hopi]

@DavidD66 Thanks a lot but sch  SE is automaticly generated I do not make it, it comes with Sch C.

No problem! 

[DaveF1006]

It looks like you are still trying to prepare this on a 1040 resident return using Turbo Tax.  Instead prepare a non resident return using Sprint tax.  There may be a built a mechanism in their software that will exclude Schedule SE recognizing the fact you are a non-resident.

@Sam Hopi