Lori Meadows
College students who work part-time at their schools may be exempt from paying Social Security taxes, which are calculated as a percentage of gross wages. However, this exemption only applies to students who obtain employment because of their enrollment. Students who work for foreign governments or international organizations may also be exempt. On the other hand, self-employed college students are responsible for paying both the employee and employer portions of the Social Security tax, which can add up to a significant amount.
| Characteristics | Values |
|---|---|
| Who needs to pay Social Security tax? | Almost everyone in the U.S. has to pay Social Security taxes throughout their entire working lives. |
| Who is exempt from Social Security tax? | Students working for the same school they're enrolled in, members of certain religious groups, and non-resident aliens. |
| What is FICA? | The Federal Insurance Contributions Act (FICA) is a social security and Medicare tax collected from employees and employers. |
| Who is exempt from FICA? | Students working for the school they're enrolled in, postdoctoral students, medical residents, and medical interns. |
| What is the Social Security tax rate? | 6.2% for employees and employers as of 2025, for a total of 12.4%. |
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What You'll Learn
Students working for their college
Students working part-time at the college they are enrolled in may be exempt from paying Social Security taxes. This is known as the student FICA exception. FICA stands for Federal Insurance Contributions Act and covers Social Security and Medicare taxes.
To qualify for the exemption, the student's employment must be contingent on their full-time enrollment at the college. The student must be predominantly attending the college for educational reasons, not employment. The exemption only applies to the student's wages from the college and does not extend to any other employer.
The student FICA exception also applies to students enrolled on less than a half-time basis if they require less than the standard number of credits to complete their degree. The exception also covers summer employment if the student is enrolled and attending classes in the summer session.
The student FICA exception does not apply to postdoctoral students, postdoctoral fellows, medical residents, or medical interns as these positions are not considered to be for the purpose of pursuing a course of study. It also does not apply to professional employees, which are employees whose work requires advanced knowledge in a field, involves the exercise of discretion and judgement, and is predominantly intellectual in nature.
It is important to note that while claiming the student FICA exception can result in significant savings, it also means the student will not be eligible to receive any Social Security benefits.
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Foreign students
However, if foreign students on these visa types remain in the US for more than five years and meet the "Substantial Presence Test," they may become resident aliens for US tax purposes and lose their exemption from FICA taxes. At this point, their wages become subject to the same Social Security and Medicare tax rules that apply to US citizens. It's important to note that the transition from nonresident to resident alien status for tax purposes is complex and can vary based on individual circumstances.
Additionally, there are certain exceptions to the FICA tax exemption for nonresident foreign students. For instance, FICA taxes do not apply to payments received by students employed by a school, college, or university where they are enrolled and pursuing a course of study. This exemption applies regardless of the student's US tax residency status.
In terms of filing tax returns and claiming refunds, foreign students may need to complete specific forms, such as Form 8316 and Form 843, to request a refund of Social Security taxes withheld in error while on a nonresident visa. They may also need to provide additional documentation, such as their W-2 form, passport, and visa information. It is recommended that foreign students consult official sources, such as the Internal Revenue Service (IRS) website, for detailed instructions on their tax obligations and how to navigate the tax filing process.
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Religious exemptions
Students working for the school they are enrolled in may be exempt from paying Social Security taxes, but only if their employment is a direct result of their enrollment. This means that if a student works part-time at their college, and their employment is contingent on their continued enrollment, they may qualify for exemption. This only applies to the wages earned at the educational institution and does not extend to any other employers.
Members of certain religious groups may be exempt from paying Social Security taxes. To qualify for this exemption, several requirements must be met. Firstly, the individual must be a member of a recognized religious sect with established tenets and teachings that conscientiously oppose accepting benefits under any private or public insurance plan. This includes benefits such as payments for death, disability, retirement, or medical care.
Secondly, the religious group must have been in continuous existence since December 31, 1950, and must make reasonable provisions of food, shelter, and medical care for its dependent members. Additionally, members must waive their rights to all benefits under the Social Security Act, including hospital insurance benefits. This means that if an individual chooses to take advantage of the exemption, they will be ineligible to receive any Social Security benefits.
To apply for the religious exemption, individuals must complete Form 4029 - Application for Exemption from Social Security and Medicare Taxes and Waiver of Benefits. This form can be obtained from the Internal Revenue Service (IRS) and must be filed with the Social Security Administration.
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State and local government employees
Full Social Security coverage (mandatory Social Security tax) was mandated beginning July 2, 1991, for state and local government employees who are not members of a qualifying public retirement system (FICA replacement plan) and who are not covered under a Section 218 Agreement. A Section 218 Agreement is an agreement between the state and the Social Security Administration. Under some circumstances, an employee may be excluded from Social Security or Medicare, or both.
Social Security covers about 96% of all U.S. workers, with the vast majority of the remaining workers being state, local, and federal government employees. While these noncovered workers do not pay Social Security taxes on their government earnings, they may still be eligible for Social Security benefits.
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FICA tax withholding
FICA, or the Federal Insurance Contributions Act, mandates that employers withhold three separate taxes from an employee's gross earnings. These are:
- 6.2% for Social Security tax, withheld from the first $168,600 an employee makes in 2024, and $176,100 in 2025.
- 1.45% for Medicare tax, withheld on all of an employee's wages.
- 0.9% Medicare surtax withheld on single filer employee wages over $200,000 per calendar year (over $250,000 for joint filers).
The Social Security tax rate is 6.2% for employees and employers as of 2025, for a total of 12.4% when combined. Self-employed individuals are responsible for paying both the employee and employer portions of the Social Security tax, as well as both portions of the Medicare tax.
Almost all American workers are required to pay into FICA, which contributes to Social Security benefits for retirees, survivors, and disabled workers. However, there are some exemptions to paying Social Security tax, including for some students. Students working for the same school they are enrolled at may be temporarily exempt from paying Social Security taxes. This only applies if their employment is a direct result of their enrollment. Foreign students and educational professionals in the US on a temporary basis are also exempt from paying Social Security taxes.
If an individual takes advantage of the exemption, they will be ineligible to receive any of the benefits offered by Social Security.
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Frequently asked questions
Yes, students who work for the same college they are enrolled at may be exempt from paying Social Security taxes. This only applies if their job is contingent on their continued enrollment.
Yes, there are several other groups who are exempt from paying Social Security taxes. This includes certain religious groups, non-resident aliens, and employees of foreign governments.
No, the exemption only applies to income earned from the college where the student is enrolled. Any income from other employers will be subject to Social Security taxes.
The Social Security tax rate is 6.2% for employees and 6.2% for employers, for a total of 12.4%. Self-employed workers must pay the full 12.4% themselves.
