Students on CPT, OPT, STEM OPT are exempt from FICA Taxes (Social Security and Medicare Taxes). In other words, you don’t have to pay FICA taxes on your paycheck. Some employers would deduct those taxes from your paycheck. But, you can get a refund on FICA taxes from the IRS. This guide will walk you through the instructions and additional details.
FICA stands for The Federal Insurance Contributions Act. Do you want to know how to get a FICA Tax refund from IRS if you paid those taxes while on F1 Visa, CPT or OPT?
- FICA tax = 6.2 % for Social Security + 1.45 % Medicare tax.
Students on F1 Visa who are working on OPT are Exempt from FICA Tax for a certain period.
If your salary is $50,000 per year, then $3,825 is paid as FICA tax annually as an Employee. Did you know your employer is also paying the same amount to the IRS?
Let’s look at the following question from an F1 Visa holder who wasn’t aware of this exemption and has paid FICA taxes.
I have a question regarding FICA taxes. As an OPT student, I am exempt from FICA taxes, but these taxes are still getting deducted from my salary. I know that I can file for a refund of this money to the IRS. But I was wondering if there is any way to stop these deductions from my salary itself. (So that I don’t worry about filing for a refund). I checked this with my employer. But company people were not sure. And I wanted to check with the IRS, but I could not due to the shutdown. It will be great if you could throw some light on this.
OPT and FICA Taxes
- As per IRS you don’t have to pay FICA Taxes (Social Security and Medicare) for F1 Visa, student until 5 years in USA.
- The employer’s payroll processing team should be aware of this
- If not, no worries, you can educate them and ask them not to deduct FICA taxes from your paycheck.
- Worst Case: If they continue to deduct the FICA taxes, you can claim it back while filing your taxes in April (or later).
- You can apply for FICA Tax refund via service provider SprinTax (look under their Services).
Click here to learn about 16 FAQ About Filing Income Tax for International Students in USA.
IRS: FICA Taxes and OPT Students
The following is taken from the IRS Website
Nonresident aliens, in general, are also liable for Social Security/Medicare Taxes on wages paid to them for services performed by them in the United States, with certain exceptions based on their nonimmigrant status. The following classes of nonimmigrants and nonresident aliens are exempt from U.S. Social Security and Medicare taxes:
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 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.
- Exempt Employment includes:
- On-campus student employment up to 20 hours a week (40 hrs during summer vacations).
- Off-campus student employment allowed by USCIS.
- Practical Training student employment on or off-campus.
- Employment as professor, teacher or researcher.
- Employment as a physician, au pair, or summer camp worker.
If You Paid FICA Taxes?
You can ask your employer to read the IRS site about FICA Taxes. If they continue to deduct taxes, then you can request a refund of FICA taxes withheld from your paycheck back from IRS.
How to Get FICA Tax Refund from OPT Period
There are two ways to apply for Social Security and Medicare Taxes paid during the OPT and STEM OPT Period and both procedures are listed below:
- Use SprinTax to Prepare Forms
- Self Prepare Required Forms
1. Use Sprintax for FICA Tax Refund
FICA taxes are paid by the employer to the IRS. They don’t keep it with them after deducting from your paycheck. So, Employer is going to ask you to get refund directly from the IRS. There’s an easy way to request refund using Sprintax.
SprinTax will help you prepare the required forms. Then you will, print them, add other forms provided by their checklist and mail to the IRS.
2. Self-Prepare FICA tax Refund Forms
Following is the procedure to get FICA Taxes Refund (from IRS Site)
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.
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 (PDF). 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 of 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)
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.
Hope this helps. Let me know if you have any questions about claiming the FICA tax refund. Also, read the comments shared here. It will be helpful.
Refer to additional articles in this Tax Filing Series.
- Part 1: 10 FAQ’s about International Student Taxes
- Part 2: Frequently Asked Questions About Filing Taxes for F1 Students (this article)
- Part 3: How to get FICA Tax Refund for OPT and STEM OPT Students
- Part 4: Resident or Non-Resident Alien – Substantial Presence Test Calculator
- Part 5: SprinTax Reviews: Prepare F1 Taxes Online
Note: If you file your taxes using the SprinTax link, we get a small referral fee. We appreciate if you use the referral link. That’s one way for you to support HappySchools.com