What Is Form 8316 for FICA Tax Refunds?
Understand the employer-based process for certain nonresident aliens to reclaim Social Security and Medicare taxes that have been withheld in error.
Form 8316 is a document used by certain nonresident aliens to request a refund of Social Security and Medicare (FICA) taxes incorrectly withheld by an employer. This form is not submitted to the Internal Revenue Service (IRS) at first. Instead, you provide the completed form to your employer, who is responsible for processing the refund and taking corrective measures with the government to reclaim and return the funds.
Determining Eligibility for a Refund
Eligibility for a FICA tax refund is limited to individuals who are considered nonresident aliens for tax purposes. This exemption primarily applies to those in the United States on F-1, J-1, or M-1 visas who are performing services that align with the purpose of their visa, such as on-campus work or authorized practical training. The exemption is based on Internal Revenue Code section 3121, which specifies that these individuals are not subject to FICA taxes.
Your tax status is determined by the Substantial Presence Test, which measures the days an individual is physically present in the U.S. Students in F-1, J-1, or M-1 status are exempt from counting days of presence for their first five calendar years in the U.S. Once a nonresident alien meets the Substantial Presence Test, they are reclassified as a resident alien for tax purposes and lose their FICA tax exemption for subsequent years.
Information and Documents Needed to Complete Form 8316
To complete Form 8316, you will need your full name as it appears on your Social Security card, your current address, and your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). The form also requires details about your employer, including their name and address. You must have the exact figures for your wages and the amounts of Social Security and Medicare taxes withheld from your Form W-2.
You must also prepare copies of several documents to submit with the form:
- A complete copy of your Form W-2 for the refund year.
- Copies of your passport and U.S. visa (F-1, J-1, or M-1).
- Your Form I-94, Arrival/Departure Record.
- A copy of your Employment Authorization Document, if required for practical training.
Once you have collected the necessary data and documents, you can complete the form. You will list the tax year for which you are requesting the refund and the total wages that were subject to the erroneous withholding. You must also certify your visa status during the period of employment.
The Refund Request Process
Submit the completed Form 8316 and all supporting document copies to the employer who withheld the taxes. Do not send these documents to the IRS at this stage. The responsibility shifts to the employer to verify your eligibility and process the claim.
Upon receiving your request, the employer uses the information to file Form 941-X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund, with the IRS. This form allows the employer to correct wage and tax information from a previously filed payroll tax return. By filing Form 941-X, the employer claims a refund from the IRS for the FICA taxes they should not have paid on your behalf.
After the employer receives the adjustment or refund from the IRS, they will issue the refund payment directly to you. The process is designed to flow through the employer, who acts as the intermediary between you and the IRS.
When the Employer Cannot or Will Not Issue a Refund
Obtaining a FICA tax refund directly from your employer is not always possible. This can occur if the employer has gone out of business, refuses to cooperate, or if the time for them to amend their payroll tax returns has closed. In these instances, you have an alternative path for seeking your refund directly from the government.
If your attempts to get the refund from your employer are unsuccessful, you must use Form 843, Claim for Refund and Request for Abatement, and submit it directly to the IRS. When filing Form 843, you must attach a copy of the previously completed Form 8316 and all the same supporting documents.
A requirement for filing Form 843 is a statement explaining why you could not obtain the refund from your employer. This statement should detail the steps you took to contact them and the reason for their failure to provide the refund. This direct claim to the IRS can take several months to process.