Atlanta Tax Expert,

Thank you for your assistance.

Since my wife's employer didn't withheld her Social Security and Medicare tax because they think she should be exempted from those two taxes, how can she file on her tax form about this? Does she need to pay the penalty?

BTW, what's meaning of first year choice?

I appreciate your help!

BBJ:

First Year Choice is the name of a program which allows dual-status aliens and aliens converting from F-1 to H01 or H-1B status to file as a resident alien if they wait long enough to qualify for the Substantial Presence Test. They have to be in country for motn of December in 2005 and qualify by being on H-1B status for over 183 days.

As long as she told her employer about her status and the length of time she was in the country, she is not responsible if her employer fails to withhold Social Security and Medicare taxes. The IRS considers the employer responsible for paying employment taxes and withholding the employee's share from the paycheck. Your wife has no forms to file to pay for the Social Security and Medicare taxes not withheld.