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    paulmaneesh's Avatar
    paulmaneesh Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Jan 4, 2006, 06:38 AM
    J1 Fica
    Hi, I am on a J1 since Nov 2003. For 2003, I filed Non-resident alien and for 2004 I filed Resident alien taxes. But the whole of 2005, my Employer deducted FICA from my paycheck. In Sep 2005 I changed the Employer who will give me a 5 year J1. They don't deduct my FICA but only the Federal & State taxes. Since I will be returning to my home country after my J1 status is over, should I be paying the FICA?
    I'd appreciate your advise.
    Regards -/Paul
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Jan 4, 2006, 07:33 AM
    Paul:

    Based on your input, In my opinion, when you filed as a resident alien, you made yourself liable for Social Security and Medicare taxes in 2005.

    Further, the tax exempt status under the J-1 visa has a limited lifespan (I believe it's three years). It is possible that your tax exempt status expired after 2004, which is why your employer may have withheld Social Security and Medicare taxes from your 2005 wages.
    paulmaneesh's Avatar
    paulmaneesh Posts: 2, Reputation: 1
    New Member
    		  
    #3

    Jan 4, 2006, 11:03 AM
    Hi, Thanks for the information. Just found out that since my income is now termed as a Fellowship rather than a salary, they said I don't have to pay the SS taxes. But in case I intend to stay in this country, then, they said, it would be better to keep paying for your retirement.
    Thanks again. -/Paul
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #4

    Jan 4, 2006, 01:13 PM
    Paul:

    In my opinion, if you can avoid paying Social Security and Medicare taxes, avoid making those payments. The Social Security program is in serious financial trouble (though no one is willing to admit that fact).

    You can put the money to better use investing in an IRA.
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