Hi All,

First of all thanks a lot for reading this post.
Now, my question:
I just finished my PhD after 6 years of work and have started working for a firm on the OPT status. I lost my NR status after 5 years as an F-1 student and filed as a resident for tax purposes (If somebody thinks that I could have maintained my NR status, please advise.. ) for the 2006 tax year.

I am now confused about whether I need to pay the social security/medicare/federal taxes while on OPT especially when I am a resident for tax purposes. My friends told me that I should not have to pay the "resident" taxes as I am a student and a non-resident alient.

Would somebody please clarify this situation for me? Any links to the corresponding documentation will greatly help.

Thanks a lot for all your help in advance.

Mr. Singh:

No, you had it right for 2006: you MUST file as a resident alien.

Your friends are wrong! Since you HAD TO file as a resident alien for 2006, then you ARE liable for Social Security, Medicare and federal AND state income taxes for 2007. Sorry, that is the law, and the provisions for the exemption is covered both in IRS Pub 519 and in the Indian-U.S. Tax Treaty.

Mr. Singh:

No, you had it right for 2006: you MUST file as a resident alien.

Your friends are wrong! Since you HAD TO file as a resident alien for 2006, then you ARE liable for Social Security, Medicare and federal AND state income taxes for 2007. Sorry, that is the law, and the provisions for the exemption is covered both in IRS Pub 519 and in the Indian-U.S. Tax Treaty.

Dear AtlantaTaxExpert,

Thanks a lot for the prompt clarification.
Looks like I will not be saving any taxes on my OPT... The law is the law..
Thanks once again
GS

Glad to help!

Contact me by email if you have other issues or questions!