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afcinc · Nov 20, 2014, 02:48 PM

Can someone with a F1 student visa be paid as an independent contractor and thus receive a 1099-MISC at the end of the year? We will be using the individual for a 3 month project and plans call for her to be paid as a contract worker and not as an employee. Here supervisor is asking whether this is permitted considering her F1 student (actually post student) visa.

AtlantaTaxExpert · Nov 20, 2014, 03:31 PM

Technically, the F-1 student is supposed to be paid under Form W-2 with state and federal income taxes withheld.

The F-1 student is EXEMPT from FICA (Social Security and Medicare) taxes.

However, employing F-1 students as independent contractors is common practice and is NOT detrimental to the student, provided he/she puts money aside to pay the tax bill when they file Form 1040NR with a Schedule C. The Schedule C allows the student to deduct employee costs which they normally could NOT deduct if paid under Form W-2, so it is a WINNING situation for the student, as he/she will pay the a somewhat lower amount of income tax under the Form 1099-MISC.

tickle · Nov 20, 2014, 03:41 PM

Your answer is NO, you cannot be paid as an independent contractor, but technically Atlanta gave you a more definitive answer.

AtlantaTaxExpert · Nov 20, 2014, 07:36 PM

Tickle is right; the answer IS no.

However, the law is NOT enforced, and there is NO disadvantage over the long-term, as long as your residency status remains as a non-resident alien.