Hello,
Can someone please help me with my scenario?
I am on h1 for the full year 2008. My wife was on H4 until July 2008 and then she entered US on F1 in Aug 2008. Hence she passes the substantial presence test for being considered as Resident alien. I would like to file a joint return for 2008 as that would be the most beneficial scenario for me. My wife has Research Asst. and she earns money. Medicare and Social security tax is not being deducted by her school because she is on F1.

My question is we will file joint return and hence we will choose her to be considered Resident alien, should she be paying the medicare\SS taxes. Or is she still exempt from it because of her F1 status?

Thanks.

Due to her F-1 status, she is exempt from Social Security and Medicare taxes; see link below:

Nonresident Spouse Treated as a Resident (http://www.irs.gov/businesses/small/international/article/0,,id=96370,00.html)