Lori Meadows
International students in the US on F-1, J-1, M-1, Q-1 or Q-2 visas are generally exempt from FICA (Social Security and Medicare) taxes for their first five calendar years in the country. This is because they are considered nonresident aliens for tax purposes during this time. However, once this period has passed, international students are typically classified as resident aliens for tax purposes and become liable for FICA taxes. There are some exemptions to this rule, for example, if the student is employed by their school, college, or university, or if the student remains enrolled as a full-time student.
| Characteristics | Values |
|---|---|
| Who has to pay OASDI tax? | 6.2% of an employee's paycheck goes toward OASDI withholding (Social Security). |
| Do international students have to pay OASDI tax? | International students on F-1, J-1, M-1, Q-1 or Q-2 visas are entitled to a FICA exemption for their first 5 years in the US if they are full-time students. |
| What is the FICA exemption? | Social Security and Medicare taxes do not apply to services performed by students employed by a school, college, or university where the student is enrolled at least half-time. |
| What if taxes are withheld by mistake? | Contact the employer who withheld the taxes for a refund. If you are unable to get a full refund, file a claim with the Internal Revenue Service on Form 843. |
| What if I have been in the US for more than 5 years? | After the exemption period has passed, international students are classified as Resident Aliens for Tax Purposes and are subject to withholding of FICA tax. |
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What You'll Learn
- International students on F-1, J-1, M-1, or Q-1 visas are exempt from OASDI tax for 5 years
- Students on OPT are taxed on their wages at graduated rates from 10% to 37%
- International students are classified as resident aliens after 5 years and are subject to OASDI tax
- International students employed by their school, college, or university are exempt from OASDI tax
- International students can claim a refund for OASDI tax withheld in error
International students on F-1, J-1, M-1, or Q-1 visas are exempt from OASDI tax for 5 years
International students on F-1, J-1, M-1, or Q-1 visas are generally exempt from OASDI tax for their first five calendar years in the US. This is because they are classified as nonresident aliens for tax purposes during this period. After five years, international students on these visa types are typically considered resident aliens for tax purposes and become liable for OASDI tax, which is also known as FICA tax (Federal Insurance Contributions Act).
The OASDI tax rate for 2025 is 6.2% for employees, which is taken from paychecks to fund Social Security. Self-employed workers pay 12.4% for Social Security, which is part of a total FICA tax rate of 15.3%.
International students on F-1, J-1, M-1, or Q-1 visas are exempt from FICA tax during their first five years in the US, even if they are engaged in ''practical training' allowed by the United States Citizenship and Immigration Services (USCIS). This is because they are still considered nonresident aliens during this time.
Once the five-year period has passed, international students on these visa types are typically reclassified as resident aliens for tax purposes and become liable for FICA tax withholding. However, if they remain primarily students, they may be able to claim the Student Social Security and Medicare exemption.
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Students on OPT are taxed on their wages at graduated rates from 10% to 37%
Students on Optional Practical Training (OPT) are taxed on their wages at graduated rates from 10% to 37%, depending on their income level. OPT allows international students under an F-1 visa to work in the US for 12 months, with an option to extend for STEM students.
F-1 students are generally considered nonresident aliens by the IRS during the first five years of their stay in the US. During this time, they are exempt from paying FICA (Social Security and Medicare) taxes. However, once the five-year exemption period has passed, they are classified as resident aliens and become subject to FICA tax withholding.
It is important to note that the tax structure for F-1 students can vary depending on their residency status and the specific tax laws of the state they live in. While they are exempt from FICA taxes, they may still be subject to other taxes, including local, state, and federal income taxes. Therefore, it is crucial for students on OPT to understand their tax obligations and consult relevant resources to ensure compliance with tax requirements.
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International students are classified as resident aliens after 5 years and are subject to OASDI tax
International students on F-1, J-1, or M-1 nonimmigrant visas are generally classified as nonresident aliens if they have been in the United States for less than five calendar years. During this period, they are exempt from Social Security and Medicare taxes (also known as FICA or OASDI taxes). Social Security (OASDI) tax accounts for 6.2% of an employee's paycheck, while Medicare tax accounts for 1.45%, for a total FICA tax rate of 7.65%.
After five years, international students are typically considered resident aliens for tax purposes and are subject to FICA/OASDI tax withholding. Resident aliens have the same liability for Social Security and Medicare taxes as U.S. citizens. However, even after this five-year period, international students who remain primarily students may be able to claim the Student Social Security and Medicare exemption.
It is important to note that the five-year exemption for international students also applies to any period in which the student is engaged in ''practical training' allowed by the United States Citizenship and Immigration Services (USCIS). Additionally, FICA/OASDI taxes do not apply to payments received by students employed by the school, college, or university where they are enrolled and pursuing a course of study.
The United States has also entered into Totalization Agreements with several countries to avoid double taxation with respect to Social Security taxes. These agreements must be considered when determining whether an individual is subject to U.S. Social Security and Medicare taxes.
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International students employed by their school, college, or university are exempt from OASDI tax
International students on F-1, J-1, or M-1 visas are generally considered nonresident aliens and are exempt from Social Security and Medicare taxes (FICA) for their first five calendar years in the US. This is because 6.2% of an employee's paycheck is typically withheld for OASDI (Social Security), which falls under FICA. After this five-year period, international students are typically classified as resident aliens for tax purposes and become subject to FICA tax withholding.
However, there is an exemption from FICA taxes for students employed by their school, college, or university, where they are enrolled at least half the time. This exemption applies regardless of their US tax residency status, as per Section 3121(b)(10) of the Internal Revenue Code. The student's on-campus employment must support their course of study.
For example, international students under an F-1 visa can work in the US for 12 months through Optional Practical Training (OPT). During this time, they are still considered nonresident aliens and are exempt from FICA taxes. STEM students can extend this period to 24 months.
It is important to note that international students must correctly file their federal tax returns, even though they may be exempt from certain taxes.
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International students can claim a refund for OASDI tax withheld in error
International students on F-1, J-1, M-1, or Q-1 visas are considered non-resident aliens for tax purposes during the first five calendar years of their stay in the US. During this period, they are exempt from Social Security and Medicare taxes (FICA) on wages paid to them for services performed within the United States.
However, in some cases, off-campus employers of international students may withhold Social Security/Medicare taxes in error. If this happens, international students can request a refund from their employer or file a claim with the Internal Revenue Service (IRS).
To request a refund from your employer, you should first contact them and ask for a refund. If a W-2 form has already been issued, you should request a corrected W-2c for the same year. If your employer cannot provide a full refund, you can still reclaim the withheld amount from the IRS.
To claim a refund from the IRS, you will need to file Form 843 (Claim for Refund and Request for Abatement) and Form 8316 (Information Regarding Requests for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, or M Type Visa). You may also need to provide supporting documents, such as pay statements showing the tax paid during the period you were exempt. It is important to note that the refund application process may take several months, and it is recommended to wait at least 60 days before checking the status of the refund request.
Additionally, international students should be aware that they may be eligible for tax treaty benefits that can reduce or fully exempt their income from taxes. In such cases, any overpaid amount can be refunded.
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Frequently asked questions
International students on F-1, J-1, M-1, Q-1 or Q-2 visas are exempt from the OASDI tax, which is part of FICA (Social Security and Medicare) taxes, for their first 5 calendar years in the US. After this period, they are classified as Resident Aliens for Tax Purposes and are subject to FICA taxes.
The FICA tax rate for 2025 is 7.65% for both employers and employees. This includes 6.2% for OASDI (Social Security) and 1.45% for Medicare.
The FICA exemption period covers the first 5 calendar years of physical presence in the US for full-time students. For those who are not full-time students, the exemption period is 2 years.
The FICA exemption is based on the residency status of the individual. International students on F-1, J-1, M-1, or Q-1 visas are generally considered nonresident aliens under residency rules if they have been in the US for less than 5 calendar years.
Yes, international students must also meet the "Substantial Presence Test" to qualify for the exemption. Additionally, FICA taxes do not apply to payments received by students employed by an educational institution where they are enrolled at least half-time.
