I am the business manager for a small u.s.business in NYC. We have an employee from England on an L1 Visa and another from Australia on an E3 Visa. Recently, the employee with the E3 (who is relatively new) asked why she has to pay Social security and unemployment taxes since she will never benefit from these. Can someone give me some advice about answering this and where to find it spelled out if it is. I have googled quite a bit and haven't found anything totally clear. Also, if I find that these employees are exempt, how do I work with my payroll company to change how they are set up on payroll and will I need for the employees to get any other paperwork to turn into the payroll agency? Also, will they then be able to file to receive reimbursments from the gov't for the years already paid?

She/he doesn't have to pay taxes and FICA, and social security taxes if she/he doesn't want to... all she/he has to do is move back to the home country. Living here means paying taxes, and you don't get out of certain taxes because you won't benefit from them. People with cancer who won't live to see 60 pay taxes anyway, even if they'll never benefit from social security. The point is that we all chip in to pay for it, even if we may not benefit from it. They agree to pay those taxes by benefiting here in this country from their employment.

Unless they are exempt from U.S. Social Security taxes under a totalization agreement, they will owe U.S. Social Security taxes. Both England and Australia have totalization agreements with the U.S. For complete text of the totalization agreements and for less complex descriptions of the agreements, see International Social Security Agreements

L1 and E3 visa are work visa. The income is subject to FICA taxes. They get standard deduction if they complete SPT. On nonresident return, you don't get standard deduction.

These are dual intend visas, that is a stepping stone to green card. So the visa holder gets same treatment as any other U.S. citizen or resident. If FICA taxes are not deducted form L1 and E2 visa holders it becomes unfair to U.S. citizen or residents.
Any other solution is that SS Administration finds a way to collect back FICA taxes with interest if a L1 or E3 visa holder gets green card.

Sorry if my opinion is how the law goes, but the law says that even people on visas pay FICA and other taxes. I wish they went back to when n00bs did not have the reddie capability. -sigh-

Quote:

---

Originally Posted by charlotte234s

Sorry if my opinion is how the law goes, but the law says that even people on visas pay FICA and other taxes. I wish they went back to when n00bs did not have the reddie capability. -sigh-

---

I suggest you travel around the world and meet foreign people and cultures.
You have a lot to benefit from this, and you would be much less irritated about coexisting with non-Americans...

I have traveled around the world, actually, many different countries, and I am not really all that pro-American spirit, either, but I wouldn't gripe about paying taxes into a system that I was benefiting from just because I was on a visa and wasn't going to stay there forever to benefit from the tax system's rewards.