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What is FICA Tax?
Taxes under the Federal Insurance Contributions Act (FICA) are composed of the old-age, survivors, and disability insurance taxes, also known as social security taxes, and the hospital insurance tax, also known as Medicare taxes.
Per IRS guidelines, the current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total.1
Additional Medicare Tax applies to an individual's Medicare wages that exceed a threshold amount based on the taxpayer's filing status. Employers are responsible for withholding the 0.9% Additional Medicare Tax on an individual's wages paid in excess of $200,000 in a calendar year, without regard to filing status. An employer is required to begin withholding Additional Medicare Tax in the pay period in which it pays wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. There's no employer match for Additional Medicare Tax.2
Am I required to pay FICA taxes?
In general, non-US citizens employed in the United States are required to pay FICA taxes. However, those with single intent (i.e. expected to return back to their home country post their intended purpose in the US), or non-immigrant status (or F1 visa holders) are exempt from FICA taxes.
IRS guidelines confirm that F-visas, J-visas, M-visas, Q-visas, Nonresident Alien students, scholars, professors, teachers, trainees, researchers, physicians, au pairs, summer camp workers, and other aliens temporarily present in the United States in F-1, J-1, M-1, or Q-1/Q-2 nonimmigrant status are exempt from FICA taxes on wages paid to them for services performed within the United States as long as such services are allowed by USCIS for these nonimmigrant statuses, and such services are performed to carry out the purposes for which such visas were issued to them.3
FICA tax exempt employment includes:
- On-campus student employment up to 20 hours a week (or 40 hours during summer vacations).
- Off-campus student employment allowed by USCIS.
- Practical Training student employment on or off campus (F1 CPT4 or F1 OPT4).
- Employment as professor, teacher or researcher.
- Employment as a physician, au pair, or summer camp worker.
The limitations on the FICA tax exemption are as follows:
- The exemption does not apply to spouses and children in F-2, J-2, M-2, or Q-3 nonimmigrant status.
- The exemption does not apply to employment not allowed by USCIS or to employment not closely connected to the purpose for which the visa was issued.
- The exemption does not apply to F-1, J-1, M-1, or Q-1/Q-2 nonimmigrants who change to an immigration status which is not exempt or to a special protected status.
- The exemption does not apply to F-1, J-1, M-1, or Q-1/Q-2 nonimmigrants who become resident aliens.
Further, The United States has entered into agreements, called Totalization Agreements5, with several nations for the purpose of avoiding double taxation of income with respect to social security taxes. These agreements must be taken into account when determining whether any alien is subject to the U.S. Social Security/Medicare tax, or whether any U.S. citizen or resident alien is subject to the social security taxes of a foreign country.
If My Employer Inadvertently Paid FICA Taxes, How Do I Get a Refund?
Per IRS guidelines, if social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund.6
If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement.7
Attach the following items to Form 843:
- A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld,
- A copy of the page from your passport showing the visa stamp,
- INS Form I-94,
- If applicable INS Form I-538, Certification by Designated School Official, and
- A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or that you authorized your employer to claim. If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer.
- If applicable, Form 8316, Information Regarding Request for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, or M Type Visa (PDF)8
File Form 843 (with attachments) with the IRS office where your employer's Forms 941 returns were filed. You can locate the IRS office where your employer files his Form 941 by going to Where to File Tax Returns.9
In general, non-US citizens performing services in the United States as employees are liable for U.S. Social Security and Medicare taxes. However, certain classes of non-US citizen employees are exempt from U.S. Social Security and Medicare taxes.
Specifically, F1 visa holders (i.e. International Students), temporarily present in the United States are exempt from FICA taxes on wages paid to them for services performed within the United States as long as such services are allowed by USCIS, and such services are performed to carry out the purposes for which such visas were issued to them.
If FICA taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund. If you are unable to get a full refund of the amount from your employer, file a claim for refund with the Internal Revenue Service on Form 843, Claim for Refund and Request for Abatement.
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1 Employer’s Tax Guide: https://www.irs.gov/publications/p15
2 Additional Medicare Tax: https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-28411.pdf
3 IRS, International Taxpayers, Foreign Student Liability for Social Security and Medicare Taxes: https://www.irs.gov/individuals/international-taxpayers/foreign-student-liability-for-social-security-and-medicare-taxes
4 USCIS, Student and Exchange Visitor Program, Practical Training: https://www.ice.gov/sevis/practical-training
5 Totalization Agreements: https://www.irs.gov/individuals/international-taxpayers/totalization-agreements
6 IRS, Refund of Tax Withheld in Error: https://www.irs.gov/individuals/international-taxpayers/social-security-tax-medicare-tax-and-self-employment
7 Form 843, Claim for Refund and Request for Abatement: https://www.irs.gov/forms-pubs/about-form-843-claim-for-refund-and-request-for-abatement
8 Form 8316, Information Regarding Request for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, or M Type Visa: https://www.irs.gov/pub/irs-pdf/f8316.pdf
9 Where to file my IRS returns: https://www.irs.gov/filing/where-to-file-tax-returns-addresses-listed-by-return-type