Hi, I am currently on H1B work visa. When I was on OPT last year & first half of this year, my company did not tax me on social security tax and medicare tax. Now that I am on H1B, my company seems to have forgotten to tax me on social security and medicare. My question is, if I am not taxed for those two items as a H1B worker, are there any repercussions? What would happen? Shall I tell my company to tax me on those?

Thank you very much for your help,

Kate

Kate:

You have a legal obligation to inform your company that you became liable to pay Social Security and Medicare taxes the day your H-1B became effective. I recommend that you do this in writing, probably via email to your payroll department.

Once you have done this, your employer has until 31 January 2008 to fix the problem. They can and probably will collect the taxes that should have been collected since the date you converted to the H-1B.

Now, if they do NOT collect these taxes, there will be NO repercussions with you. The IRS position is clear: collection and payment of Social Security and Medicare taxes is the responsibility of the EMPLOYER. The IRS will not come after you unless they can show you tried to hide your true visa status.

Thank you so much!

You are quite welcome!

Hi Atlanta Tax Expert,

After reading your post, I have informed my company about my eligibility to pay social security tax and medicare tax. I have kept my back and forth email correspondence with the head of HR. They told me to inform our outsource payroll department myself, and I called and set up a case with them. However, they are so unbelievably inefficient that so far no one has followed up with me on that, neither did they take out those two items from my last pay check.

I guess, from what you said, now it has become their problem since I have done my part. Again, I cannot chase behind them to have my taxes collected. What's your take? There should be no repercussion on me, right? And on 4/15, I will not be forced to pay social security and medicare taxes in one installment for the past half a year since h1b came effective?

Please let me know.

Thank you so much,

Kate

Kate:

You definitely will NOT be forced to pay the back FICA taxes on your federal tax return. The return is NOT set up for that to begin with.

To be safe, send one last email with the payroll department explaining your situation and stating that you are trying to do the "right thing". Of course, keep a copy of that email.

After that, if they do not respond by 31 January 2008, you are, In my opinion, "home free". The IRS will not come to you on this issue.

If, for some reason, they do, just show them the emails.

Its your employers job to track your immigration status and charge you the necessary taxes. If they don't charge you SS tax, its totally their problem, not yours'.

Olaka:

Look at the date of the posting; you are commenting on an issue that was discussed FOUR years ago.

Further, you are WRONG! The employee DOES have the obligation to notify the employer of their visa status AND to formally notify them that they are not handling FICA tax withholdings properly.

India has been discussing the Totalisation Agreement with the US for a long time now. This is an open issue being negotiated almost over a decade with no real actions or results. This Agreement will exempt all Social Security Taxes that Indians pay in US and transfer all the Social Security taxes we have paid so far to Indian EPFO accounts.
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Appeal to all the Indians in US is that Sign the petition if you agree, make our voices heard. It will be heard if it’s loud. Sign the petition and share this with your friends and family. It is this treaty which will help us and the generations to come.
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