Social Security and Medicare Taxes: What is the Foreign Student Liability?
Figuring out who must pay these taxes means wading through the often-esoteric language the IRS uses to categorize resident and nonresident alien status, as well as the various restrictions that apply. But as a general rule, students who meet certain nonresident alien criteria — and temporarily live in the U.S. for less than five years — are exempt from having to pay Social Security and Medicare taxes.
To qualify for the exemption, the services performed must be allowed by the U.S. Citizenship and Immigration Services (USCIS) for F-1, J-1 or M-1 nonimmigrant statuses. Exempt employment includes the following:
- On-campus student employment up to 20 hours a week, or 40 hours during summer vacation.
- Off-campus student employment allowed by USCIS.
- Practical Training student employment on or off campus.
The exemption does not apply to the following:
- Spouses and children in F-2, J-2 or M-2 status.
- Employment not allowed by USCIS or not closely connected to the purpose for which the visa was issued.
- F-1, J-1 or M-1 students who change to another immigration status which is not exempt, or to a special protected status.
- F-1, J1 or M-1 students who become resident aliens.
To learn more about the rules governing foreign-born students and employment, visit the USCIS website.
Foreign students in F-1, J-1, or M-1 nonimmigrant status who have been in the United States more than five calendar years typically become resident aliens for U.S. tax purposes and are therefore liable for Social Security and Medicare taxes. But again, there are exceptions to this rule as well.
For more information, visit the IRS page on Foreign Student Liability for Social Security and Medicare Taxes.
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