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Mav515 · Sep 17, 2009, 08:33 AM

Hi,

I am currently working on OPT since June 2009, My employer is planning to file for H1 probably this week. He is currently deducting SOCIAL SECURITY and MEDICARE taxes from my paycheck.

On asking why? My employer replies that IF I go live on OPT (october) this year then I will HAVE TO PAY SOCIAL SECURITY AND MEDICARE FOR THE ENTIRE FINANCIAL YEAR(in my case from June 2009 when I started working). IS that true?

To my knowledge I will start paying the SS/Medicare tax ONLY from the time I am on H1 right?

Am I supposed to get a refund for the taxes I have paid from June-september?

AtlantaTaxExpert · Sep 17, 2009, 09:01 AM

No, that is NOT true.

While you are on OPT, you are under the F-1 visa and are considered to be a student. Hence, you are exempt from FICA (Social Security and Medicare) taxes.

The day your H-1 visa becomes effective is the day you start paying FICA (Social Security and Medicare) taxes.

Download IRS Pub 519 from Internal Revenue Service, print out page 51 and go to your employer's payroll to politely ask for a refund of the FICA taxes withheld to date and to stop further withholding until your H-1 visa becomes effective.

Mav515 · Sep 17, 2009, 09:27 AM

Hi,

Thank you so much for the quick reply.I have been going through the IRS website myself.
So would I be a dual citizen for 2009? If my H1 is approved it goes into effect in OCT so I will be considered as an F1 student from June -september ( where all the SS/medicare taxes I paid should be refunded) and from Oct 1 I will start paying SS/Medicare taxes as usual right?

If my employer cannot refund the amount right away filing a form 843 along with the other tax return forms should get my money back?

AtlantaTaxExpert · Sep 17, 2009, 01:11 PM

Because you will NOT meet the 183-day Substantial Presence Test in 2009, you will still file as a non-resident alien for 2009, unless you want to wait until June 1, 2010 to file, at which time you could then file as a dual-status alien under First Year Choice.

However, there is normally no tax advantage to filing as a dual-status alien, so why wait? Just file as a non-resident alien for 2009 and as a resident alien in 2010.