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maryannbr · Jan 26, 2006, 09:02 AM

Hi there,

I'm very confused. I worked on my F1 (OPT) from June 15th - December 19th 2005 but my company deducted social security and medicare taxes (it's a small company and they didn't know any different). On December 19th I switched my status from F1 to H1b. Apparently I can claim a refund using form 843 for the social security and medicare taxes I've paid but a friend found the following limitation to the exemption online:

"The exemption does not apply to nonimmigrants in F-1,J-1,M-1,or Q-1/Q-2 status who change nonimmigrant status to a status which is not exempt or to a special protected status."

Does this mean I can't claim the refund? I want to make sure as it's a lot of money.

Also, from other strings it sounds like I have to file a different tax form and there are different rules for F1... where can I find more information about this?

Any help and guidance would be very much appreciated.

Thanks,

Maryann

AtlantaTaxExpert · Jan 26, 2006, 10:04 AM

Mary Ann:

Yes, you can file Form 843 to claim the refund. Download IRS Pub 519 to get the precise instructions on how to do so.

For 2005, you can:

- file Form 1040NR or 1040NR-EZ for your income tax as a non-resident alien.

OR

- wait until mid-June 2006 (be sure to file for an extension), then file Form 1040/1040A/1040EZ as a resident alien under the First Year Choice (also explained in IRS Pub 519).

Unless you get special tax treatment under the tax treaty between your home country and the U.S. it is likely that waiting and filing as a resident alien will get you a bigger refund.

maryannbr · Jan 26, 2006, 02:09 PM

That's wonderful news. I'll read up on the publication you mention as I'm unaware of the first year choice issue. This is really helpful.

Best wishes,

Maryann:)

AtlantaTaxExpert · Jan 26, 2006, 09:04 PM

Glad to help!

maryannbr · Jan 27, 2006, 07:43 AM

Just to make sure I've got this straight... I should file for a refund NOW and then file my 1040-NR or whichever form I end up filing separately at a later date?

Thanks!

Maryann

AtlantaTaxExpert · Jan 27, 2006, 05:24 PM

Yes, you can file the Form 843 for the Social Security and Medicare refunds immediately and wait (up until 15 April 2009) to file the income tax return to get your income tax refund.

maryannbr · Jan 30, 2006, 09:41 AM

Thank you thank you thank you - you are a great and much appreciated help :)

falcon1 · Jan 30, 2006, 07:41 PM

Do you need to get a written letter from the employer saying they have paid the taxes already to IRS or they will not refund it?

AtlantaTaxExpert · Jan 30, 2006, 07:44 PM

Falcon1:

Yes, the refusal from the employer has to be in writing!

falcon1 · Jan 30, 2006, 08:01 PM

Since I was on F1 part of the year 2005. My w-2 shows ss and medicare taxes for the entire year not the part of the year I was on F1. Should I just submit a copy of my last F-1 period paycheck which shows the SS and medicare taxes till that point

AtlantaTaxExpert · Jan 30, 2006, 09:40 PM

Falcon1:

Multiply the figure in Box 3 of the W-2 by .062 (6.2%). If it comes out to approximately the amount in Box 4, then you have proof that Social Security were withheld for the entire year. The same logic applies to Boxes 5 and 6 (the percentage is 1.45%, or .0145). Since the percentages involved do not change, all the IRS needs to know is when your F-1 status ended and when the H-1B status began. They can thendetermine the amount of the refund.