[jonshu3000]

Hi

My situation:
Israeli Citizen, have an SSN since August 2002.
Aug 2002 - June 2006: F1 for undergrad (including 10 months of OPT)
June 2006 - July 2008: H1B
August 2008-present: F1 for graduate school

I am going back to work for the same employer in July 2010. I have the option of using the F1 OPT or going back to the H1B.

Supposedly one can avoid the FICA payments while on F1. However, I will have been in the US 7+ years at that point. That means I am a resident for tax purposes and therefore have to pay FICA, correct? In other words, no monetary benefits to using the OPT.

Any input would be appreciated.

Thanks!

[MukatA]

Now your income is not exempt from FICA taxes even on F1 visa.
Even on F1, your days in U.S. are not exempt from residency.

[AtlantaTaxExpert]

Your interpretation of the facts are correct.

The FICA tax exemption for F-1 student is normally good for only FIVE years, which you used up from 2002 through 2006. An extension beyond five years is possible if you show "a closer connection' to your home country. However, your H-1B visa kills any claim to that closer connection.

Hence, on your second F-1 tour, you will be treated as a resident alien and liable for all of the taxes that a U.S. citizen must pay.