Do International Students Pay FICA Taxes?
International students: Understand your FICA tax status in the U.S. and navigate the rules to ensure proper Social Security and Medicare contributions.
The Federal Insurance Contributions Act (FICA) funds Social Security and Medicare, providing benefits for retirement, disability, and healthcare. These payroll taxes are typically split between an employee and their employer. While most individuals working in the United States contribute to these federal programs, tax rules for international students differ significantly from those for U.S. citizens and permanent residents. Understanding these distinctions is important for proper tax compliance.
FICA Exemption for Non-Resident Aliens
Most international students in the United States are “non-resident aliens” for tax purposes and are exempt from FICA taxes. This classification means they are not U.S. citizens or permanent residents and have not met specific residency tests. This tax status is distinct from immigration status, though visa type often determines initial tax residency.
The FICA exemption applies to individuals holding F-1, J-1, M-1, or Q-1/Q-2 nonimmigrant visas. This exemption applies as long as they remain non-resident aliens for tax purposes and their work is authorized by U.S. Citizenship and Immigration Services (USCIS) and aligns with their visa purpose. On-campus employment, authorized off-campus employment, Curricular Practical Training (CPT), and Optional Practical Training (OPT) fall under this exemption. The rationale is that these individuals are temporary visitors not expected to be long-term participants in U.S. Social Security and Medicare.
However, the FICA exemption does not apply in all cases. It does not extend to spouses and children on F-2, J-2, M-2, or Q-2 visas. An international student may also become subject to FICA taxes if they change to a non-exempt visa status, or if their work is not directly related to their student or scholar status as defined by the Internal Revenue Service (IRS). A primary reason for losing the FICA exemption is a change in tax residency status from non-resident alien to resident alien, determined by the Substantial Presence Test.
Applying the Substantial Presence Test
The Internal Revenue Service (IRS) uses the Substantial Presence Test (SPT) to determine if a non-U.S. citizen becomes a resident alien for tax purposes. This test evaluates the number of days an individual has been physically present in the United States over a three-year period. Meeting the SPT means an international student is treated as a resident alien for tax purposes, becoming subject to FICA taxes like U.S. citizens.
To meet the Substantial Presence Test for a calendar year, an individual must be present in the U.S. for at least 31 days in the current year. Furthermore, they must be present for a total of 183 days or more over a three-year period, calculated using a specific formula: all days in the current year, plus one-third of the days in the first preceding year, plus one-sixth of the days in the second preceding year. For example, if an individual was present for 120 days in the current year, 180 days in the first preceding year, and 210 days in the second preceding year, the calculation would be 120 + (180 1/3) + (210 1/6) = 120 + 60 + 35 = 215 days. Since 215 days exceeds 183, the individual would meet the SPT.
The “exempt individual” rule allows certain visa holders to exclude days of presence for the SPT calculation. Students on F, J, M, or Q visas do not count days for the first five calendar years they are present in the U.S. For J and Q non-students (teachers and researchers), this exemption applies for two out of the last six calendar years. A calendar year runs from January 1 to December 31, and any part of a year spent as an exempt individual counts as a full year. Once an international student exceeds their exempt individual period and meets the SPT, they transition to resident alien tax status and become liable for FICA taxes on their earnings.
Addressing Incorrect FICA Withholding
If FICA taxes were withheld from wages for an international student who was exempt, a refund can be sought. The initial step is to contact the employer’s payroll or human resources department. The employer might be able to refund the incorrectly withheld amounts directly, especially if the error is identified within the same calendar year.
If the employer cannot provide a refund (e.g., after the tax year has closed), the international student must apply directly to the IRS by filing Form 843, Claim for Refund and Request for Abatement. When filing Form 843, include supporting documentation. This includes:
A copy of the Form W-2 showing the incorrect FICA withholding.
A copy of the visa.
Form I-94 (Arrival/Departure Record).
Form I-20 (Certificate of Eligibility for Nonimmigrant Student Status) or DS-2019 (Certificate of Eligibility for Exchange Visitor Status).
If applicable, Form I-766 (Employment Authorization Document).
If the employer issues a corrected wage and tax statement (Form W-2c), attach this document to Form 843. The IRS typically takes three to four months to process Form 843. Claims for a refund must be filed within two years from the date the tax was paid or three years from the date the original return was filed, whichever is later.