Social security and medicare question

Forum|Forum|2 years ago
October 17, 2023
2 replies
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Because of my visa status, my employer did not withheld FICA and Social security taxes for the year 2022. However, they were incorrect in doing so (as i am considered a resident for tax purposes, irrespective of my visa status, since 2022 is my 6th tax year). For the year 2022, what are my options? Can i pay the IRS directly or do I have to go through my employer?

Best answer by pk_

@pk12_2 While reading this page, it specifies that,
"Generally, foreign students in F-1, J-1, or M-1 nonimmigrant status who have been in the United States more than 5 calendar years become resident aliens for U.S. tax purpose if they meet the “Substantial Presence Test” and are liable for Social Security and Medicare taxes. (unless they are exempt from FICA under the "student FICA exemption".
"

Student FICA Tax Exemption

Section 3121(b)(10) of the Internal Revenue Code provides another exemption from FICA (Social Security and Medicare) taxes for all students, regardless their U.S. tax residency status. Under this special exception rules, Social Security and Medicare taxes do not apply to services performed by students employed by a school, college, or university where the student enrolled at least half-time. The student’s on-campus employment must be incidental to and for the purpose of pursuing a course of study. Consequently, a foreign student who become a resident alien may be eligible for exemption if qualified. Off-campus jobs or working for other employers do not qualify. "

Since I am employed by a company in my field of study and not employed by my university, according to the above statement from IRS, it does seem like FICA applies to me. I am not sure if I am misinterpreting things. Please do help. Thank you and really appreciate your input.

@manukris , I think I have to change my position.

The issue here is whether you are an employee or a trainee. OPT is usually a trainee position and generally falls under the safe harbor ule for FICA. But this is usually with F-1 or similar student visa extension. See Rev. Proc. 2005-11 and administrative Procedural note on the subject. This depends heavily on whether the employer and the "employee" each qualify for the safe harbor exemptions. It does not delve into visa type.

The ) visa type is a non-immigrant work visa ( needs a sponsor just like H-1 visa ).

So my assumption here is that you are NOT on OPT / Trainee status but an employee. Thus your employer has to participate with you on sharing FICA .

Why did you not extend your F-1 visa if you are a trainee ?

Another issue is that for FICA an employer has to participate on a 50-50 basis for FICA contribution. The 2022 year is passed and therefore his books are closed.

Suggest you talk to the employer and seek a solution. It is a case of sleeping dog ....."

When was your visa change affected ? If in October of 2022 or thereabouts it may be better to leave it alone.

Does your employer issue a W-2 or 1042-S ?

Is there more I can do for you ?

Anonymous_

Level 15

@pk12_2?

pk_

Level 15

@manukris , based on your post I am assuming you are here on F-1 visa and thus had five years of exempt status --- please confirm or modify ?

And now you are working on H-1 or EAD and essentially on OPT or similar -- confirm or modify ?

If on practical training or similar , even if you are a resident for tax purposes ( you are here "very" temporarily and generally immune from FICA ( Social Security & Medicare ) taxes -- shared 50-50 between the employer and the employer.

Also which country are you citizen of and were you there a resident just prior to move to USA ?

I will circle back once I hear from you -- yes ?

manukrisAuthor

Level 2

Hi @pk12_2 ,
Yes for the year 2022, I was on F1-OPT and had already five years of exempt status (Filed taxes for the year 2017. 2018, 2019, 2020, 2021 as non-resident 1040-NR). For the year 2023, I changed my status to O1 (which is very similar to H1).

So to answer your question, for the tax year 2022, I am on F1-OPT. The employer thought that I was on FICA tax exempt status and did not withheld my FICA. However I already had my five years of exempt status. Hence, I am confused on what to do. From what you are saying, IRS wont hold me for not paying FICA?
I am a citizen of India. Yes, I was a resident there before my F1 status. Thank you for the information.

pk_

Level 15

@manukris , Namaste

1. for the 2022, since you were on OPT but a resident for tax purposes, you are immune from FICA taxes ( because this is training). You were probably working ( OPT ) with EAD in place.

2. For 2023 onwards though because you are on work visa and if you meet the Substantial Presence Test for the taxable year you would be subject to Federal, State and FICA ( Social Security & Medicare ) taxes just like an American citizen / GreenCard person ( US person ).

Is there more I can do for you ?

Namaste ji