Savanna Hoffman
International students in the United States may need to apply for a Social Security Number (SSN) for tax purposes and to open bank accounts. Foreign students in F-1, J-1, or M-1 nonimmigrant status are generally exempt from paying Social Security and Medicare taxes if they have been in the country for less than five years. However, there are certain conditions under which international students may be liable to pay these taxes, such as if they become resident aliens or if they earn self-employment income.
| Characteristics | Values |
|---|---|
| Who is liable to pay Social Security and Medicare taxes? | Generally, aliens performing services in the United States as employees are liable for U.S. Social Security and Medicare taxes. |
| Who is exempt from Social Security and Medicare taxes? | Foreign students in F-1, J-1, or M-1 non-immigrant status who have been in the United States for less than 5 calendar years are generally exempt from Social Security and Medicare taxes. |
| Who becomes liable after 5 calendar years? | Foreign students in F-1, J-1, or M-1 non-immigrant status who have been in the United States for more than 5 calendar years become resident aliens for U.S. tax purposes and are liable for Social Security and Medicare taxes. |
| Who is exempt from FICA (Social Security and Medicare) taxes? | Section 3121(b)(10) of the Internal Revenue Code provides an exemption from FICA taxes for all students, regardless of their U.S. tax residency status, if the services are performed by students employed by a school, college, or university where the student is enrolled at least half-time. |
| Who is liable for self-employment tax? | If a non-immigrant student earns self-employment income in the United States, such income will be subject to U.S. income tax and, if the student becomes a resident alien, self-employment tax. |
| Who can apply for a Social Security Number (SSN)? | International students can apply for an SSN after securing a job or internship in the U.S. and obtaining an employment verification letter from their institution. |
| Who cannot apply for an SSN? | Dependents in F-1 status are not eligible for an SSN. F-1 students without lawful F-1 employment are also ineligible to apply for an SSN. |
| What is the process for applying for an SSN? | Students can apply for an SSN online at www.ssa.gov/ssnumber or www.ssa.gov/number-card. They must then present their original proof of ID, age, and lawful resident status, as well as any required letters, to their local Social Security office within 45 days. |
| How long does it take to receive an SSN? | It typically takes 2-4 weeks to receive an SSN, but it can take longer. |
| What is an Individual Tax Identification Number (ITIN)? | The ITIN is issued by the Internal Revenue Service (IRS) to international students and scholars who are not eligible for an SSN. |
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What You'll Learn
F-1, J-1, or M-1 students
Foreign students in the United States with F-1, J-1, or M-1 status for less than five calendar years are considered nonresident aliens and are generally exempt from Social Security and Medicare Taxes on wages for services performed within the United States. To qualify for this exemption, the services performed must be allowed by the USCIS for these nonimmigrant statuses, and such services must be performed to carry out the purposes for which such visas were issued. This exemption applies to on-campus student employment (up to 20 hours a week, or 40 hours during summer vacations), off-campus student employment allowed by the USCIS, and practical training student employment on or off-campus. However, it is important to note that the exemption does not apply to spouses and children in F-2, J-2, or M-2 status, nor to employment not allowed or closely connected to the purpose of the visa.
It is important to note that nonimmigrant students are generally not permitted to earn self-employment income in the United States. If an F-1, J-1, or M-1 student earns self-employment income, they may become liable for self-employment tax in addition to income tax. If social security or Medicare taxes were withheld in error, the student should contact their employer for a refund. If unable to obtain a full refund from the employer, a claim for a refund can be filed with the Internal Revenue Service using Form 843 and Form 8316, along with supporting documents.
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$18.99
Resident aliens
In general, resident aliens have the same liability for Social Security and Medicare taxes as US citizens. This means that resident aliens are subject to the same rules as US citizens regarding Social Security and Medicare taxes on wages paid to them for services performed within the United States.
Nonresident aliens are generally also liable for Social Security and Medicare taxes on wages paid to them for services performed in the United States, with certain exceptions based on their nonimmigrant status. For example, nonresident aliens in F-1, J-1, M-1, or Q-1 status who are temporarily present in the United States for less than five calendar years are generally exempt from Social Security and Medicare taxes. However, this exemption does not apply to F-1, J-1, or M-1 students who become resident aliens. These students generally become resident aliens for US tax purposes if they have been in the United States for more than five calendar years and meet the "Substantial Presence Test", making them liable for Social Security and Medicare taxes.
There are also certain classes of nonimmigrants and nonresident aliens who are exempt from US Social Security and Medicare taxes, such as employees of foreign governments and their families, as well as certain types of services that are exempt from Social Security and Medicare taxes, including compensation paid to a duly ordained minister of a church in the exercise of their ministry.
Additionally, the United States has entered into Totalization Agreements with several nations to avoid double taxation of income with respect to Social Security taxes. These agreements must be considered when determining whether any alien, including resident aliens, is subject to US Social Security and Medicare taxes.
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Self-employment income
International students in the United States on F-1, J-1, M-1, or Q-1 nonimmigrant visas are typically exempt from paying Social Security and Medicare taxes on wages earned within the United States. This exemption is valid for up to five calendar years, after which they may be classified as residents for tax purposes and become subject to these taxes.
However, it's important to note that the rules regarding self-employment income for international students are different. Generally, nonimmigrants are not permitted to earn self-employment income in the United States. If an international student violates their nonimmigrant status and earns self-employment income, this income will be subject to US income tax. Additionally, if they become a resident alien, their self-employment income will also be subject to self-employment tax.
There are some exceptions and special considerations for certain visa types and employment categories. For example, J-1 scholars, teachers, researchers, and other non-students in J-1 status are considered nonresidents for tax purposes and are exempt from FICA taxes for the first two calendar years of their presence in the US. After this period, they become subject to FICA withholding unless they depart the country within the first 183 days of their third calendar year.
Additionally, the United States has entered into Totalization Agreements with several countries to avoid double taxation of income with respect to Social Security taxes. These agreements must be considered when determining an individual's liability for Social Security and Medicare taxes.
It is always advisable for international students to consult official sources, such as the Internal Revenue Service (IRS) or seek professional tax advice, to understand their specific tax obligations, as the rules can be complex and depend on various factors, including visa status, income sources, and the duration of their stay in the United States.
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Social Security Number (SSN)
A Social Security Number (SSN) is a 9-digit identifier issued by the U.S. Social Security Administration (SSA). It is granted based on an individual's eligibility to work in the United States. However, possessing an SSN alone does not confer work authorization. International students need an SSN to report income and pay taxes to the Internal Revenue Service (IRS) while employed in the U.S.
International students are eligible to apply for an SSN only after securing a job or internship in the U.S. and obtaining an employment verification letter from their institution. They must also provide evidence of their eligibility to work in the U.S. and valid F-1 employment authorization. J-1 students are required to show evidence of employment and must be in valid J-1 status and be registered for a full course of study.
The SSN application process can be completed online at www.ssa.gov/ssnumber or www.ssa.gov/number-card. Applicants must then present their original proof of ID, age, and lawful resident status, as well as any required letters, to their local SSA office within 45 days of the online submission. Alternatively, applicants can visit a Social Security Office or Social Security Card Center in person to apply.
It typically takes two to four weeks to process and issue an SSN, so applicants should initiate the process well before their intended job start date. The SSN is valid for life and can be used for a variety of unofficial purposes, such as opening phone, utility, or bank accounts.
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Individual Tax Identification Number (ITIN)
International students on F-1, J-1, or M-1 non-immigrant status are generally exempt from Social Security and Medicare taxes if they have been in the United States for less than five calendar years. However, if they become resident aliens or violate their non-immigrant status by earning self-employment income, they may become subject to these taxes.
Now, an Individual Taxpayer Identification Number (ITIN) is a 9-digit number issued by the IRS for federal tax purposes only. It is available to certain non-resident and resident aliens, their spouses, and dependents who cannot obtain a Social Security Number (SSN). An ITIN does not authorise you to work legally in the US or serve as identification outside the federal tax system.
To obtain an ITIN, you must complete and submit IRS Form W-7, Application for IRS Individual Taxpayer Identification Number. There are three ways to apply:
- Fill out Form W-7 and submit it with your tax return.
- Contact an IRS-authorised Certifying Acceptance Agent, such as colleges, financial institutions, or accounting firms, to review your documentation and forward your application to the IRS.
- Make an appointment with the IRS Taxpayer Assistance Center.
If your ITIN is lost, do not apply for a new number. Instead, you can check previous tax returns or contact the IRS at 1-800-829-1040 to retrieve your ITIN. ITINs can be renewed in person, by mail, or by submitting Form W-7 with your tax return.
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Frequently asked questions
International students in the US on F-1, J-1, or M-1 nonimmigrant status are generally exempt from social security taxes if they have been in the country for less than 5 calendar years.
International students in the US on F-1, J-1, or M-1 nonimmigrant status who have been in the country for more than 5 calendar years generally become resident aliens for tax purposes and are liable for social security taxes.
Section 3121(b)(10) of the Internal Revenue Code provides an exemption from social security taxes for all students, regardless of their tax residency status, for services performed by students employed by a school, college, or university where the student is enrolled at least half-time.
International students can apply for an SSN by visiting a Social Security Office or Card Center. They will need to provide proof of employment and valid F-1 or J-1 employment authorization.
International students who are not eligible for an SSN but need to file a tax return can obtain an Individual Tax Identification Number (ITIN) from the Internal Revenue Service (IRS).
