Hello,

This forum is very informative. Thanks for the input of Atlanta Tax Expert!

I arrived in US in 1999 and I am on F-1 OPT since Sept 2005. I've heard that people on F-1 OPT are exempted from SSN and Medicare taxes. However, my employer said that since I've stayed in US for more than 5 years, I am no longer eligible for the exemption therefore they withheld these two taxes from my paycheck.

I'm a little confused even after reading some related quesitons posted here.

First, do I indeed need to pay SSN and Medicare taxes according to the 5-year rule? Can I ask my employer for refurnds? Is there any exception to this 5-year rule that I can use in my favor?

Second, if my employer turned down my request for refund, can I file for refunds from IRS next spring? And how?

Third, suppose I am still on F-1 OPT by the time I file the tax next spring, what form should I use? Suppose I've swtiched to H-1B by the time I file tax next spring, what form should I use then?

Thanks

Luby:

In my opinion, your employer is correct. Since you have been in country for more than five years, you are liable for Social Security and Medicare taxes. Regardless of whether they are correct or not, they are taking the "safe" approach of withholding and paying these taxes. If they failed to do so and then later found that you were liable for the taxes, they would be required to pay both their shares and your share of the taxes without the option of collecting them from you after the fact.

You may be able to get an exception to the rule under the argument that you are still a student while on OPT. Get your employer's refusal to refund the Social Security and Medicare taxes in writing, then file Form 843 along with all the required specified in IRS Pub 519 (Chap 8, page 46).

Form 843 is the form used regardless of your visa status at the time you file your tax return.