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how do i with hold pay roll taxes for a foreign student

how do i with hold pay roll taxes for a foreign student
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9/24/2013
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,136
Experience: Taxes, Immigration, Labor Relations
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Lev :

Hi and welcome to our site!
Students on F1 visa are generally considered nonresident aliens as long as they comply with their visa terms. That is not a matter of choice. Under the residency rules of IRC section 7701(b) most foreign students are considered to be "exempt individuals." That is, they are exempt for extended periods of time from counting days of presence in the United States for the purposes of determining whether they are resident aliens of the United States. Thus, most foreign students remain nonresident aliens in the United States for extended periods of time.

Lev :

Foreign Student Liability for Social Security and Medicare Taxes - see this page for requirements - http://www.irs.gov/Individuals/International-Taxpayers/Foreign-Student-Liability-for-Social-Security-and-Medicare-Taxes
See - Off-campus student employment allowed by USCIS - thus this specific employment has to be authorized by USCIS.
As a lawfully employed nonresident with F1 you are not subject to FICA withholding, however, the law requires that FICA tax be withheld from wages received from unauthorized employment. To claim an exemption, you must provide (1) verification of visa status and (2) proof of work permission to the employer.

Customer:

I-9 form was filled out and now we are completing a W-4 . What do we use use for a SSAN and how do we determine how much Medicare and Social Security and Federal withholding

Lev :

Students on F1 visa are generally considered nonresident aliens as long as they comply with their visa terms. That means - special authorization is required for any work performed as an employee.
In general aliens performing services in the United States as employees are liable for U.S. Social Security and Medicare taxes.
Foreign students who work with special authorization as part of their educational process and comply with visa terms are excluded from Social Security and Medicare Tax withholding.

Lev :

W-4 form directs income tax withholding.

Lev :

If you are a nonresident alien, see Notice 1392, Supplemental Form W-4 Instructions for Nonresident Aliens, before completing this form - www.irs.gov/pub/irs-pdf/n1392.pdf‎


Line 2. You are required to enter a social security number the highest-paying job and zero allowances are claimed on the (SSN) on line 2 of Form W-4.


Line 3. Check the single box regardless of your actual marital status.


Line 5. Generally, you should claim one withholding allowance.
Line 6. Write “nonresident alien” or “NRA” on the dotted line.
Line 7. Do not claim that you are exempt from withholding.


Lev :

If that is Off-campus student employment allowed by USCIS - there is NO Medicare and Social Security.
If that is NOT authorized employment - Medicare and Social Security are withheld as for other employees.
For income tax withholding - you will use W4 information and withholding tables from IRS publication 15 -


www.irs.gov/pub/irs-pdf/p15.pdf‎

Customer:

This gentleman does not have a social security card. He has an employment authorization card. It has him as student post- completion opt

Lev :

For employment purposes - he need to apply for SSN.
An employment authorization card is OK - but SSN is needed for tax reporting. Tell him to contact a local SSA office.
As he is on OPT - Medicare and Social Security are withheld as for other employees.

Customer:

Thank you.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,136
Experience: Taxes, Immigration, Labor Relations
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In additional to our conversation...
Please find in attached references information about required documents to apply for SSN
http://sait.usc.edu/ois/ssn/how-to-apply.aspx
http://www.columbia.edu/cu/isso/visa/F-1/SSN.pdf

F-1 OPTIONAL PRACTICAL TRAINING and other off-campus employment authorized with an EAD:
F-1 students who apply for an SSN on the basis of OPT or off-campus employment must present their EAD card, passport,
I-20 and I-94 admission record to the SSA. You may apply for an SSN on or after the effective date of authorized employment indicated on the EAD card.
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Lev
Lev
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