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Refunding your Social Security & Medicare Taxes

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:

  1. 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 unable or unwilling to provide a refund – do the following:

  1. Complete IRS Form 843, "A Claim for Refund and Request for Abatement".
  2. 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).
  3. 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.
  4. If you are an F or J visa holder you also need to complete Form 8316.
  5. Make a photocopy of all these documents and keep them with your other tax records.
  6. 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!

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IRS Form 843 Claim for Refund and Request for Abatement
      Use Form 843 only if your employer refuses to refund Social Security taxes withheld in error.

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IRS Form 843 Instuctions
      Read these instructions carefully to properly complete IRS Form 843.

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IRS Form 8316 Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien
      If you are an F or J visa holder you need to complete IRS Form 8316 when filing IRS Form 843.

Instructions for Form 843

Question 1
Indicate the dates that you were employed where Social Security Taxes were withheld. If you worked for more than one tax year you will need to complete a Form 843 for each tax year.

Question 2
Write the amount of Social Security Taxes that were withheld.

Question 3
Place an "X" in the "Employment" box.

Question 4
Leave Blank

Question 5a
Check the third box. Write "Social Security Tax Erroneously withheld by employer. See Attached Forms 8316, W-2 and I-94"

Signature
Sign your name and put today’s date.

Instructions for Form 8316

Question A
If Social Security Taxes were withheld from your paycheck and you meet the requirements described on page one of this handout place an "X" in the "Yes" box.

Questions 1-5
Should be answered by your employer, or verified by a statement/letter given to you by the employer.

Statement
If you were unable to obtain a statement or assistance with the above questions from your employer please state why this was not possible.

Question 7
Write "No"

Question 8
Write "$0.00"

Question 9
Name and address of employer (print clearly)

Sign, date
Print clearly a phone number that you can be contacted at. Also indicate a time that it would be easiest to contact you at this telephone number.

Do Not Mail these documents with your annual income tax return!