[apuri]

Hi,
I am on F1 visa in US since 2002. In Sept 2008, I started my OPT, so I have 2 W-2s, one from my university and one from my current OPT employer.
I understand that since I have passed 5 years, I should fill the 1040 form rather than the 1040NR form. Please confirm.

Also, I was pro-active to call my HR and stop them from taking any social security or medicare taxes. Now, if I fill a 1040, my assumption is that if I don't mention OPT somewhere there, the feds will come back and get all the social security out of me.

Can someone shed some light into this, as how to mention (some additional form) in 1040 that I am on OPT, so I am exempt from social security and medicare.

Thanks.

AP

[AtlantaTaxExpert]

Confirmed; your F-1 exemption expired on 31 December 2006. For both 2007 and 2008, you should file as a resident alien, filing Form 1040.

However, for 2006, 2007 and 2008, you WERE liable for Social Security and Medicare. Now that you know this, you have the legal obligation to so notify your employer. Do this in writing (email is good for this), then let your employer decide whether yo take corrective action.

Now, you CAN avoid paying any back taxes on the Social Security and Medicare IF you make the argument that you have maintained a "closer connection" to your home country and intend to return there after your OPT is completed.

This argument will be voided if you apply for H-1 or H-1B status.

[apuri]

Confirmed; your F-1 exemption expired on 31 December 2006. For both 2007 and 2008, you should file as a resident alien, filing Form 1040.

However, for 2006, 2007 and 2008, you WERE liable for Social Security and Medicare. Now that you know this, you have the legal obligation to so notify your employer. Do this in writing (email is good for this), then let your employer decide whether yo take corrective action.

Now, you CAN avoid paying any back taxes on the Social Security and Medicare IF you make the argument that you have maintained a "closer connection" to your home country and intend to return there after your OPT is completed.

This argument will be voided if you apply for H-1 or H-1B status.

Thanks for the answer. I do intend to apply for H-1B status in the next couple of months. So, from your explanation I understand that even though I am on OPT, since I am considered a resident alien for tax purposes (5 year rule) I am obligated to pay Social Security and Medicare. Is that correct? Or the law works in favor for the OPT?

[AtlantaTaxExpert]

That is correct. When you exceeded the five year and failed to make the "cloer connection" argument, your earned income became liable for FICA taxes.