F1 OPT to H1B visa status change

[Anonymous]

Hello,

I moved to the U.S in August 2014 on an F-1 visa. My visa status changed from F1-OPT to H1B in December 2019. Can I use Turbotax to file my taxes?

[KarenJ2]

Yes, you can use TurboTax to prepare your 2019 tax return.  You were exempt from counting US days of presence for 2014, 2015, 2016, 2017, and 2018 (5 years or part years).  You had to start counting US days of presence on January 1, 2019.  

As you had more than 183 days of presence in the US in 2019, you are considered a US resident from January 1, 2019.

[Anonymous]

Thank you for your response. I tried filing my tax on TurboTax, and it estimates that I owe around $950, and not getting a refund. Is this because of the Medicare and Social Security tax that I was exempt from on F1 OPT? 

[LinaJ2020]

No, your tax owed has nothing to do with your FICA taxes.  As an F-1 holder, you are not entitled to pay this tax.  The reason you owe could be you did not have enough income tax withholding to cover your total tax liability.  If you have a Form W-2, check box 2 on the form.  You might need to adjust your Form W-4 for your 2020 taxes.  Without seeing your tax return and information, it is hard to say.  

I would suggest you consider our new product / features TurboTaxLive to file your 2019 taxes to have one of our tax professionals to take a look.  In the TurboTax program, once you complete your taxes, before you file, you’ll be given the option for a final review of your return by one of our tax professionals.  After they completed reviewing your return, they’ll inform you of any proposed changes.

Here are the details:

https://ttlc.intuit.com/replies/6071042 

[Anonymous]

Thank you for your response. My Box 2 shows around $6619.31. Do I need to pay FICA taxes from the day my status changed to H1B last year? Also, can I use TurboTaxLive to fix my W4 issues? 

[KarenJ2]

As you were considered a US tax resident from January 1, 2019, you were responsible for paying FICA taxes during all of calendar year 2019.  You will need to work with your employer to correct this issue. 

See the below link for more information.

Social Security/Medicare Tax Liability of Foreign Students,etc

TurboTaxLive should be able to assist you with correcting your W-4.

[Anonymous]

Thank you for your response. It looks like I have paid the FICA taxes from October 2019 when my visa status changed from F1 OPT to H1B. Why do I have to pay for the entire year then? 

[KarenJ2]

Thank you for your question.  I do not know if the link to the IRS page worked for you.

Please go online and search for the IRS website:   Social Security/Medicare and self-employment Tax Liability of Foreign Students, Scholars, Teachers, Researchers, and Trainees.

You will find the following in the IRS article.

The IRS has published regulations which stipulate that aliens who arrive in the United States on F,J,M, or Q visas will be assumed to be "NONRESIDENT ALIENS," but only to the extent that the assumption is consistent with the residency rules of IRC section 7701(b). Since the social security/Medicare tax exemption for foreign students, scholars, teachers, researchers, and trainees under the Internal Revenue Code requires that the payee be a "NONRESIDENT ALIEN", then the social security/Medicare tax exemption ceases to exist at the point the payee becomes a "RESIDENT ALIEN" under the residency rules of IRC section 7701(b).

[vishalc711]

Hey,

I am also in same position as for residency status. I was an F1 student from Aug 2014 to Sept 2019, I am exempt from counting US days of presence for 2014, 2015, 2016, 2017, and 2018 (5 years or part years). But I was still in OPT in 2019 till sept 30th 2019 and switched to H1B from oct 1st 2019. Thus my employer did not deduct FICA tax from Jan - Sept 2019.  So should I file as resident with 8843 or file non-resident with 8843 because I was in OPT.

Also on IRS website says Student FICA exemption is applicable to Residents under some cases

"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" discussed below)."

"Also, the Internal Revenue Code provides one exemption from social security/Medicare taxes for foreign students and another exemption from social security/Medicare taxes for all students, American and foreign. This is the so-called "student FICA exemption", and it may operate to exempt a foreign student from social security/Medicare taxes even though the foreign student has already become a RESIDENT ALIEN. For employment which occurs after April 1, 2005, Revenue Procedure 2005-11 provides instructions for determining who is eligible for the "student FICA exemption"

Thanks

[KarenJ2]

You will need to file as a US tax resident for 2019 and can use Turbo Tax.  It looks like you would be exempt from FICA/Medicare taxes (if you qualify) even though you are a US resident.  If you qualify this would exempt you from January to October 1, 2019.

Student FICA Exception

[vishalc711]

Hey,

I have read that "Student FICA Exemption" but I am not sure if I am included in that category or not. I have been working in OPT from April 2017 till Sept 2019 and have not paid FICA tax as OPT is exempt from FICA through form 8843. The form 8843 say 5 calendar year (2014-2018) but asks for reason if we file more than 5 years like statement. I also read that post five years, I have to do a substantial presence test to determine my residency status. If that is case, as I was in OPT from Jan 2019 to sept 2019 should I exempt it in my SPT test, then I become NON-RESIDENT as I was in USA with H1B for only 3 months and all older days are exempt. If we consider all the days from beginning 6th year irrespective of my OPT/F1 visa status I become a RESIDENT. 

Can someone please help me clarify what is my correct status for my situation.

Thanks 

[KarenJ2]

Unfortunately, we are not experts in student FICA exemption.  Perhaps someone at your school or more research on the web will lead you to the answer you are looking for.  

[Zion0131]

Hi, @vishalc711 , were you able to find an answer to your question from 2020?

Similarly to you, tax year 2020 will be my 6th year as a student (2010 and 2011 as J1, while 2017, 2018 and 2019 as F1), hence, I will exceed the 5-year life time rule for students and trainees. On the other hand, there is an exception to the 5-year rule for students as long as they meet the requirements set by IRS here:

https://www.irs.gov/individuals/international-taxpayers/the-closer-connection-exception-to-the-subst...

If I have changed status in 2020 from F1 to H-1B on October 1, 2020, can I still file for the exception for the days in the US in 2020 that I was on F1 (January 1 - September 30, 2020), given that I have transitioned away from F1 and I am no longer a student at the end of 2020?

If I can exempt the days on F1 I will not meet the substantial presence test and I can file as a nonresident alien. If I can not exempt the days under F1 as I have changed visas in 2020 and I am no longer a student, I have to file as a resident.

Thanks   

[DaveF1006]

According to this IRS link, you are eligible to be an exempt individual for 5 calendar years (2017through 2021) so you can file exempt for 2020, even though it is a part of a year.

[Zion0131]

Thanks Dave, the complication is that I was on J1 visa in 2010 and 2011, which years count towards the 5-year life time limit based on my understanding. Do you read it differently?

Thanks,