[abhiguns]

Hi. I am a single Indian Student in the US from 2007. I have been on CPT from June 23 and will be working till Dec 19. During this time my taxable pay has been $1160 per week + taxable housing incentive of $208 per week. I get $798+$125 in hand after tax with holdings. They are withholding my FICA taxes which I know I will get back.
The tax cuts per week are as follows
Federal: 209.69
FICA: 88 apprx
NY State: 62.64

Similar tax cuts are there in the housing paycheck too.

Initially I had my federal taxes withhold by my employer. But I exempted myself for a period of 4 weeks. After coming to know that I can benefit from the India-US tax treaty I started withholding taxes again by submitting a new W4.

Will I be eligible for the reaping the tax benefits treaty even after withholding taxes for 4 weeks. If so how much taxes should I be expecting back ?

[MukatA]

1. Ask your employer to return you the FICA taxes deducted by them from your paycheck.
2. On your tax return you will get $3500 of exemption deduction and $5,450 of standard deduction. So your income of $8,950 is not taxable.
3. you must file non-resident tax return to get tax refund.
Read: Your U.S. Tax Return: U.S. Tax Filing Requirements for Non-Residents

[abhiguns]

So income of 8950 is not taxable although I had blocked my federal taxes for a 4 week period ?

[AtlantaTaxExpert]

You ARE liable for state and federal INCOME taxes, but you are exempt from FICA (Medicare and Social Security) taxes.

Due to your personal exemption ($3,500) and the standard deduction ($5,450) that Indian students are permitted to claim, you will pay income taxes on $25,250.

The federal income tax liability will be about $3,500, so you need to make sure AT LEAST that amount is wthheld from your pay for the federal tax bill.