Hi

I was a F1 student from Jan 2002 to Dec 2007.
I am an Indian citizen and single
I am currently doing my OPT (started from Oct 2007 to Oct 2008).

During 2007, Social security and Federal taxes are not deducted like before.

Do I need to pay them back to IRS? If yes, how do I need to file taxes and pay Social and Medicare taxes back?

What forms do I need to file 1040 or 1040 EZ or 1040 A?

Am I resident alient for tax purposes?

Your help is appreciated

Thanks

G Krishna

AtlantaTaxExpert

You ARE a resident alien for tax purposes for 2007. You need to file Form 1040, 1040A or 1040EZ.

The FICA tax exemption allowed under the F-1 visa has a 5-year time limit. Your exemption expired on 31 Dec 2006.

Now, your EMPLOYERS will be held responsible by the IRS to collect and pay the FICA taxs for 2006. Your legal obligation is to tell the employers that you WERE liable for FICA taxes in 2007, then leave the rest to them.

I would suspect that they will do NOTHING, because they have already closed the 2007 books for FICA taxes. If they go back and amend those employer tax returns, the IRS will impose some rather large fines for their failure to do it right the first time.

More than likely, they will do nothing and take the chance that the IRS will never find out, which IS more than likely what will happen.

However, that is NOT your concern. If you pay the unpaid Social Security and Medicare taxes (it can be done using Form 8919), it will only prompt the IRS to question your employers as to WHY they failed to withhold these required FICA taxes.

Eventually, the employers will figure out WHO tipped the IRS off, and you can imagine how they will react.

Krishna007

Thanks for your response..
Please give me a suggestion.
Shall I talk to my employer about that and file 1040 EZ (in which nothing is asked about how much FICA taxes) are deducted and stay calm without mentioning about unpaid FICA taxes?

Thanks,
Gopal.

Krishna007

I find in Tax Treaty that for India
"The individual is entitled to these benefits only for a period of time considered reasonable or customarily required to complete studying or training."

MukatA

When you complete a nonresident tax form, it requires that you attach a statement as to why your studying continued during the 6th year.

Also this is form Publication 4011:
If your stay exceeds 5 years you must get permission from the IRS Field Assistance Area Director to continue to be an exempt individual.

Krishna007

Thanks for Response,
Does it mean I file the same forms as last year (1040NR EZ and used Tax treaty benefits) and attach this additional letter? Does attaching a letter sufficient to ger permission from IRS Field Assistance Area Director? What if they reject the application?

AtlantaTaxExpert

You would probably need to file Form 8833 along with Form 1040NR-EZ to justify being treated as a non-resident alien while being on a F-1 visa for longer than five years.