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biyao73
Level 1

FICA Tax Not Deducted During CPT

Hi,

 

I have been an exempt individual since 2016 (J1 and F1 visa). Hence, I passed the substantial presence test on July 3rd, 2021, and became a RA for tax purposes. And I used my CPT to work on a summer internship from June to September 2021. 

 

However, when I filled out the onboarding information for my internship in late May, since I have not passed the substantial presence test yet, I claimed to be an NRA. Therefore, during my entire internship, no FICA taxes were deducted. 

 

In 2022, as a RA, I used TurboTax to file my tax return for 2021 but I am a bit concerned about not paying the FICA taxes during my internship. Will that be an issue? Should I do anything to fix it?

 

Thanks a lot for your help!

1 Best answer

Accepted Solutions
pk
Level 13
Level 13

FICA Tax Not Deducted During CPT

@biyao73 , the short answer as to whether your change of tax status  ( from NRA to RA for tax purposes ) changes your  FICA exception,  is a clear MAY NOT BE.   This is because FICA exception is not based on your  tax status. It is based on your  visa / student status and  that of your employer.    It is well opined/detailed in Revenue Procedure 2005-11. Generally speaking for FICA exception  (a) you must be an active student/ trainee  during the CPT period; (b) you must perform service for school/college/university or non-profit org. auxiliary to a school/College/University. There are also exceptions for professional employees with exceptional knowledge/skills when all the facts and circumstances are considered.

Bottom line --- since your were a student at the time and  on F-1, the payments during CPT ( and arranged through the school/ univ. ), would generally be FICA exception.

 

Is there more I can do for you?

 

pk

@tagteam 

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3 Replies
tagteam
Level 15

FICA Tax Not Deducted During CPT

@pk (again)?

pk
Level 13
Level 13

FICA Tax Not Deducted During CPT

@biyao73 , the short answer as to whether your change of tax status  ( from NRA to RA for tax purposes ) changes your  FICA exception,  is a clear MAY NOT BE.   This is because FICA exception is not based on your  tax status. It is based on your  visa / student status and  that of your employer.    It is well opined/detailed in Revenue Procedure 2005-11. Generally speaking for FICA exception  (a) you must be an active student/ trainee  during the CPT period; (b) you must perform service for school/college/university or non-profit org. auxiliary to a school/College/University. There are also exceptions for professional employees with exceptional knowledge/skills when all the facts and circumstances are considered.

Bottom line --- since your were a student at the time and  on F-1, the payments during CPT ( and arranged through the school/ univ. ), would generally be FICA exception.

 

Is there more I can do for you?

 

pk

@tagteam 

biyao73
Level 1

FICA Tax Not Deducted During CPT

Hi,

 

Thanks a lot for the response!

 

The employer is not a school/university/non-profit but a consulting firm. However, I did find the opportunity through my university.  Will that change anything?

 

Thanks again!

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