Hi,

I have read a few other similar cases but I am still confused about the FICA tax issue.
I had been in the US since 2003 on F1 visa. I was working at my university before I graduated (up until April 2008). Then I started work on OPT since June 2008. My questions are:

1. Do I have to pay FICA tax for the period that I worked at my university on F1? Is work at university exempt from FICA?

2. I believe I have to pay FICA tax from June 2008 to Dec 2008 since I am a resident alien for tax purpose. My company, however, insists that they do no withhold FICA for F1/OPT. What are my options?

3. When I file my tax return using form 1040, do I need to fill in line 58 which says "unreported social security and medicare tax" with an attached Form 8919?

4. I saw on another thread that because we are now in a new calendar year, my employer cannot legally make me pay the FICA tax I owe for the year 2008. Is that true?

I thank you in advance for your answers. Sorry for the numerous questions. I am just keen to be on the right track.

AtlantaTaxExpert

1) Work FOR the university ON university grounds is almost always exempt from FICA taxes, even if you are a U.S. citizen.

2) You can still be exempt from FICA taxes while on F-1 past the 5-year exemption window IF you can show that you have maintained a "closer connection" to your home country. Thekeyissue is your intent after the OPT period. If you plan on requsting an H-1 or H-1B visa, that will undercut any closer connection argument you could make.

3) Do NOT submit Form 8919. You have told your employer about your status, and that is all that is required of you. Filing Form 8919 will only cause trouble for your company and, ultimately, for you.

4) Yes, that is technically true. However, if you do not cooperate, your future with that company is rather dim, don't you think?

newtotax

Thank you so much Atlanta Tax Expert! Your help is much appreciated!

AtlantaTaxExpert

Glad to help!

linux4gen2

Hi AtlantaTaxExpert,

I am in the similar situation as newtotax. Because I meet the substantial presence test, I have filed tax return as resident alien for last year. This year I am on an OPT and I am not sure if I am exempted from FICA.

IS there a requirement that if I file tax return as resident alien, I cannot claim FICA exemption.

Thanks a lot.

AtlantaTaxExpert

If you filed as a resident alien for 2008 (the correct way to file due to 2008 being your SIXTH year in country), then you CANNOT claim exemption from the FICA taxes. It is the FIRST thing the IRS checks when they receive the Form 843 requesting a refund of FICA taxes.

In order to claim FICA tax exemption, you must FIRST amend your 2008 return to change it to a non-resident return. Further, since the IRS defaults to you being a resident alien in your sixth year in the U.S., the burden of proof to show a "closer connection" to your home country rests with you.

Note that this is a HARD SELL to the IRS, especially since you have already filed as a resident alien, unless you have some compelling evidence that you have maintained your connection (like a wife and children remaining in your home country).

BOTTOM LINE: I suspect that any attempt to covert back to a non-resident alien status would be, at best, a 50-50 proposition.

linux4gen2

Thanks a lot. I will not claim FICA exemption.

AtlantaTaxExpert

Glad to help!

airstar

Hi AtlantaTaxExpert,

I came to USA by using F1 visa in 2006 and filed non-resident alien for 2008 due to I was working under OPT. But now, I am applying for green card and just receive EAD card (Employment authorizatino card) valid from 7/1/09 to 6/30/10. During this period, my lawyer says I am under the status of "awaiting adjustment" and actually dont have a visa right now. Since I've never paid FICA before, do I suppose to pay FICA start from July 2009? Or I can pay FICA until my green card being approved?

Thanks in advance for your kindly answer.

Rita

AtlantaTaxExpert

Your previous visa status applies until you get the Green Card, so, IMHO, you are NOT liable for FICA (Social Security and medicare) taxes until your Green Card is approved.