[alaskageologist]

I have been working on F1-OPT since last August and my employer deducted FICA for two months as both of us were not aware of the exemption (am in USA for less than 5 yrs). When I informed my employer about the exemption they asked me whether there is any exemption form issued by IRS that I/they can fill and submit, if any.

I searched IRS site and found no such form. Form 843 is there but it's a refund form for erroneous deduction. So my question is what kind of documents my employer needs; I-20/OPT card and a copy of my visa would work?

[wnhough]

QUOTE," So my question is what kind of documents my employer needs . . ."---- Youe employer needs to visit the following website:Foreign Student Liability for Social Security and Medicare Taxes Let your employer read the section ," The Social Security/Medicare Tax Liability"

[MukatA]

You can give your employer a copy of pages 50-51 of IRS Publication 519: Tax for Aliens.  (Read Social Security and Medicare Tax-- Students and Exchange Visitors.

[alaskageologist]

Thank you MukatA and wnhough. I have another question. I filled in form W-4 for the new employment, but whether I need to submit W-8BEN also?

[AtlantaTaxExpert]

Negative; Form W-8BEN is to cite exemptions under tax treaty.

The FICA tax exemption is a matter of U.S. tax law.

[alaskageologist]

Hi Atlanta Tax Expert , Thanks for your reply. Cold you be little more specific please?
I am from India which has a tax treaty with US. My wife stays with me as F2. Last year while on F1 status I claimed deduction for my spouse and got it. Now for 2010-11 as am working on F1-OPT (since Aug 2010) whether still I need to furnish W8-BEN, as I understand this form is intended to show the employer that the concerned employee is a foreign national who may have a tax treaty with US and therefore the employer would withheld less than 30% as the tax.

Earlier this year I filled W8-BEN while I was working with the university but forgot to submit another one to my new employer and so I believed they are withholding 30% of my salary. So either I can submit a new W8 BEN now or simply I can let them withheld at 30% rate. But once I filed my return next April as a non resident alien from India (< 5 yr in USA) shall I get the appropriate refund?

[AtlantaTaxExpert]

FICA (Social Security and Medicare) taxes are NOT covered in any tax treaty; the exemption for non-resident aliens is covered under the tax laws of the United States.

Like MukatA states, you should download IRS Pub 519 and print out pages 54-55, which explains the exemption in sufficient detail to convince your employer to NOT withhold these taxes.

To get the refund of FICA taxes alreay withheld, you FIRST ask the employer to refund those taxes. If the employer refuses to refund the taxes, get a refusal letter on company letterhead, then you need to submit Forms 843 and 8316 to request the refund from the IRS. Getting the refund from the employer is both easier and faster, and the IRS requires that you try that first.

The withholding of INCOME taxes is driven by the Form W-4 you complete and submit to the employer. The most allowances you are allowed to claim is MARRIED with TWO allowances.

[alaskageologist]

Hi Atlanta Tax Expert; again thanks for your reply. Now my doubt about FICA is clear. But still am not sure about W8-BEN. Please refer my last post about w8-BEN.

Eagerly waiting for your response

[MukatA]

No, you will submit W-4.

[wnhough]

QUOTE," Please refer my last post about w8-BEN."---Right! You do not need the Form W-8BEN.FormW-8BEN is used to establish that you are not a U.S. person,claim that you are the beneficial owner of the income for which Form W-8BEN is being submitted or claim a reduced, or zero, withholding as a resident of a foreign country with which the United States has an income tax treaty.
It can be used to claim exception from domestic information reporting and backup withholding for income,i.e. it can be used to claim exception from domestic information reporting and backup withholding for income,i.e. broker proceeds, or inbterest on bank deposits etc. that is not subject to foreign-person withholding.