[vikrant123]

Hi everyone, Hi ATE

*sigh* I hope I am not in big trouble here..

Working for employer A since Feb 1, 2005.

Feb 1 2005 - Oct 15 2005 : OPT Status

Oct 15 - Present : H1B status

On my OPT period, my employer withheld my SSN and Medicare taxes in spite of continuous requests.

Now I am all set to claim these back using Form 843 and 8316.

I just discovered though, that I filed my 2004 taxes erroneously as a Resident Alien. Someone told me that I should now file as Resident Alien in 2005 too and it is likely that IRS won't notice the change.

If I do file as a resident in 2005 now, will it affect my SSN and Medicare refund claim?
Some websites say that the documents required are W2, pay stubs, I-20, EAD card and the statement from employer, and I have all these documents.

ATE please shower your golden advise... Ill really appreciate it..

[rahul_sega]

Hey Vikrant, I don't believe this!

I have the exact same situation.. almost similar visa status dates and the mess up with filing as Resident alien last year... but in my case I have already filed my taxes as a Resident Alien for 2005 and was about to send in the forms for the refund of ssn and medicare...

Atlanta Tax Expert... should I send in the 843 and the 8316 for SSN and Medicare? Will I fall into a lot of trouble here?

[AtlantaTaxExpert]

Rahul and Vikrant:

It was my opinion that whether you file as a resident or a non-resident was irrelevant to whether you should be paying Social Security and Medicare taxes. It was my belief that it was driven by your visa status. However, a careful review of the facts as stated in IRS Pub 519 has caused me to revise my thinking somewhat.

NOTE TO ALL WHO READ THIS FORUM: PLEASE READ MY ANSWER BELOW CAREFULLY!! What I am about to write is a modification of my previous guidance.

If you file as a resident alien, you will forfeit the right to claim refund for the withheld Social Security and Medicare taxes. This is different than guidance I have issued in the past. Your filing status DOES AFFECT whether you can claim a refund for Social Security and Medicare taxes.

That said, all is not lost in your cases. If you are both Indian nationals, you were entitled to claim the standard deduction in past years regardless of whether you filed as a resident or non-resident alien.

For this reason, you can petition the IRS to regain your non-resident alien status, probably with little or no additional tax due. You should file Form 1040X for 2004 and, in Rahul's case, 2005, and request that the IRS restore you to non-resident alien status. They may or may not do it; it is their option.

If status is restored, you can then file the Form 843 to request the refunds. Note that the refund is not automatic. The IRS has to assess your situation to determine if the refunds are justified. Do not file the Form 843 until you get an answer from the IRS on your resident vs non-resident status. If you do so and it is rejected, you will not get a second chance!