Dear Expert, here I have two questions regarding my tax status.

I came here to the United State in Aug 2000, so technically this is my 5th calendar year, I believe I should file as a Resident on tax purpose. However, because I am still working on OPT, my company's payroll says I do not need to pay SS and Medicare, even after I told them that this is my 5th year. So I am wondering is it my responsibility or my company's that I didn't pay SS and Medicare? Am I considered as resident on tax purpose?

Also, I filed jointly as resident with my husband last year because he is on H1B, so I am wondering does that affect that I need to pay SS and Medicare as well? Can I file seperately as non-resident if applicable?

In a word, I am wondering what shall I do with my SS and Medicare? Shall I pay for it? What if I don't? Thanks for your advice.

lakshmi

Minny, I am also in a similar situation as you. If you find an answer to your question please email me at lakshmi_ramachandran at rediffmail.com

Thanks
Lakshmi

AtlantaTaxExpert

Miny:

The fact that you filed jointly with your husband last year effectively made you a resident alien. You can reverse that decision by filing an amended return (Form 1040X) and attaching a Form 1040NR. That is the only way you can file as a non-resident alien for Tax Year 2005.

You may want to amend your 2004 return, because, in my opinion, your joint filing for 2004 makes you liable for Social Security and Medicare taxes as a resident alien in 2005. Inform your company’s payroll that you filed as a resident alien last year and I suspect they will change their position about your Social Security and Medicare tax liability.

If they do not change their position and insist you do not have to pay Social Security and Medicare taxes, then do not worry about it. Withholding Social Security and Medicare taxes from employees, paying these taxes to the IRS in a timely manner and understanding the tax law is the responsibility of your employer, not you.

Vio

Dear Expert,

I have a similar question:

I came to USA in August 2000 on F1 student visa. Now I am working on OPT (my OPT started July 15th 2005). My employer withholds social security and Medicare taxes from my stipend. Is this ok? Am I still a non-resident alien for tax purposes or I am considered a resident alien?

Thank you,
Violeta

AtlantaTaxExpert

Vio:

The day you switch over to an OPT, your visa status should convert to H-1 or H-1B.

Any income earned after that day is liable for Social Security and Medicare taxes. Your employer is correct in withholding these taxes.

For 2005, you probably need to file as a dual-status taxpayer. You also have the option of filing as a resident alien.

kt168

me too i have the same quetion;

i started my OPT this year. And I'm paying SS and medicare tax I want to know if i can have medicare insurance like a us resident or a us native. Please i really want this answer!

thank you,
kathy

MukatA

If you have not completed 5 years on F1/OPT, then you do not pay SS tax and Medicare tax on your wages.
When did you enter the U.S. on F1?

AtlantaTaxExpert

The posting I made back in 2005 is in error!

Someone on OPT is considered to be STILL under their F-1 visa and this are EXEMPT from FICA (Social Security and Medicare) taxes UNLESS their total stay while under the F-1 visa exceeded FIVE years.

Please answer MukatA's question about WHEN you first entered the country on your F-1 visa so that we may provide good guidance.