As a lawfully employed nonresident F-1 or J-1 visa holder you are not subject to social security withholding or reporting requirements until your 6th year in the U.S. (However, the law requires that social security tax be withheld from wages received from unauthorized employment.) Therefore, wages received by nonresident F-1 or J-1 visa holders working on the campus they are authorized by DHS to attend, performing off-campus work with DHS permission, undergoing approved practical or academic training are not subject to social security requirements. To claim an exemption from social security tax, you must provide verification of visa status and proof of work permission to the employer.
If you are an F-1, or J-1 visa holder who is a resident alien for tax purposes, your wages are subject to social security (FICA) and unemployment (FUTA) taxes on the same terms which apply to U.S. citizens. J-2 and H visa holders, whether resident or nonresident, must pay social security tax. Social security taxes and benefits apply to U.S. permanent residents on the same basis as U.S. citizens.
Thus, to summarize, both the Internal Revenue Code and the Social Security Act allow an exemption from social security/medicare taxes to international students who have entered the United States on F-1 or J-1 status and who are still classified as nonresident aliens under the residency rules of the Internal Revenue Code. As discussed above, this means that students in F-1 or J-1 nonimmigrant status who have been in the United States less than all or part of 5 calendar years are still nonresident aliens and are still exempt from social security/medicare taxes. This exemption also applies to any period in which the international student is in practical training allowed by the INS, as long as the international student is still a nonresident alien under the code.
International students in F-1 and J-1 nonimmigrant status who have been in the United States more than 5 calendar years are resident aliens and are liable for social security/medicare taxes. When measuring your date of entry for the purposes of determining the 5 calendar years mentioned above, the actual date of entry is not important. It is the calendar year of entry which is counted toward the five calendar years respectively. Thus, for example, an international student who enters the United States on December 31, 2003 counts 2003 as the first of his/her five years as an exempt individual.
Occasionally social security tax is withheld in error. Nonresidents may not request a refund of social security taxes on their annual income tax return (Form 1040NR or 1040NR-EZ).
You must instead do the following:
- You must contact the employer who withheld the tax for assistance. Tell the employer to issue a refund and correct their Form 941 Employment Tax Return for the quarter(s) in question.
If the employer is unwilling to provide a refund – do the following:
- Complete IRS Form 843, "A Claim for Refund and Request for Abatement".
- Attach copies of the Form W-2 for the year(s) in question, a copy of your Form I-94, and proof of permission to work (Employment Authorization Card or other written approval from the UCIS).
- Attach a letter from your employer that shows the amount of the refund that was request and the amount (if any) reimbursed by your employer. I you can not obtain such a statement you must verify that you have contacted your employer and that the employer was unable/unwilling to assist with the refund.
- If you are an F or J visa holder you also need to complete Form 8316.
- Make a photocopy of all these documents and keep them with your other tax records.
- Mail the documents with copies of your W-2 and I-94 Card to the Internal Revenue Service Center where the employer files tax reports. If you do not know the location of the employer’s IRS service center, submit your request for refund to the same location you mailed your current years tax return. Mail them separately, but to the same location.
This is not a fast process. We advise anyone who does this to wait 60 days before attempting to contact the IRS by phone to verify the status of the refund request. Be sure to put an address on Form 843 that will be accurate for the next 3-4 months!