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Lev
Lev, Tax Advisor
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Experience:  Taxes, Immigration, Labor Relations
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Hello, My company is filling my taxes for 2012 and now out

Customer Question

Hello,

My company is filling my taxes for 2012 and now out of nowhere they have determined that I need to pay Social Security & Medicare taxes for 2012 which I never paid in the first place. They are claiming that I have passed the 5 year limit on F1 visa.

The situation is like this. I came to US in Aug 2005 on F1 visa to do my Bachelors degree and completed it in May 2010 and got another F1 visa for my master’s degree from June 2010 till June 2015. I filled for opt in Dec 2011 & started working for my company from Jan 2012. I worked for them in US from Jan 9 2012 till May 31 2012 and then they moved me to Europe for 9 months. I worked in Europe from June 1 2012 till Mar 22 2013 and came back on H1B visa.

My question is, in my condition. Do i have to pay Social Security & Medicare taxes as they are creating new W2 now for it?

Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

LEV :

Hi and welcome to Just Answer!
In general aliens - including nonresident aliens - performing services in the United States as employees are liable for U.S. Social Security and Medicare taxes. However, certain classes of alien employees are exempt from U.S. Social Security and Medicare taxes.
In particular - nonresident Alien students temporarily present in the United States in F-1 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.

LEV :

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.
LEV :

So - I assume that was off-campus student employment - to be exempt from Social Security & Medicare taxes - such employment MUST be specifically allowed by USCIS. Without special USCIS permission wages may not be exempted.

Customer :

I understand the boundary conditions set by USCIS but on OPT, i can work for any employer in US who is e-verified and in that situation mine is.

Customer :

It was not an off campus job. I had completed my masters in Dec 2011 and filled OPT right then and started working full time on opt

LEV :

There is no issue with your work permit - you may work on OPT - that is not a question.
However - without special USCIS permission for that off campus job - wages may not be exempted and are subject of Social Security and Medicare taxes.

LEV :

Another issue would be for you to maintain nonresident alien status while on F1 visa.

Customer :

How come my F1 status came into play , when i graduated from college and have the permit to work for any employer

LEV :

Again - you are permitted to work on OPT - that is not an issue - but that doesn't exempt you from Social Security and Medicare taxes.

Customer :

under I.R.C. § 7701(b)(3)(B) and (C) and Treas. Reg. §(NNN) NNN-NNNNb)-2 . I was not in the states for more than 183 days so, i can be exempt from FICA

Customer :

Is That true

LEV :

That is related to the determination if you are a resident alien or a nonresident alien.
That determination is important because resident aliens are taxed on ALL worldwide income while nonresident aliens are taxed only on income from US sources.
However that is relevant to FICA. As I mentioned above - aliens - including nonresident aliens - performing services in the United States as employees are liable for FICA. I also mentioned specific conditions under which wages are excluded from FICA for students. Specifically for off-campus student employment - to be exempt from FICA - such employment MUST be specifically allowed by USCIS. If you have such authorization - you may simply provide a copy to your employer. If not - there is nothing you may do.

Expert:  Lev replied 1 year ago.
A student temporarily present in the United States under an “F,”“J,”“M,” or “Q” visa, who substantially complies with the requirements of the visa may be treated as “exempt individual” - means - you do not count days for which you are an exempt individual for the substantial presence test in determination if you are a resident alien or a nonresident alien.

If you exclude days of presence in the United States because you were temporarily in the United States as a student, you must file a fully completed Form 8843.
Generally - you should attach Form 8843 to your income tax return. If you do not have to file a return, send Form 8843 to the Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215.
If you meet the substantial presence test and do not file form 8843 - you are treated as a resident alien and exemption from FICA mentioned above would not apply for your situation. That is in relation to you question - "How come my F1 status came into play"

Sorry if the tax law doesn't favor your situation.
Please do not shoot the messenger - I may only explain the law - but may not change it.
Please feel free to ask if any clarification needed or if you have other tax related issues.

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Taxes, Immigration, Labor Relations