Ibrahim Gardner
OPT students on F-1 visas are generally exempt from paying Social Security and Medicare taxes (FICA taxes) for up to five calendar years of being in the United States. This exemption also applies to students on other visa types such as J-1, M-1, Q-1, or Q-2. However, after this five-year period, OPT students may become resident aliens for tax purposes and be subject to FICA taxes. It's important to note that OPT students are required to pay federal and state income taxes on their wages, and they need to complete a W-4 tax form with their employer.
| Characteristics | Values |
|---|---|
| OPT students' tax liability | OPT students are required to pay taxes on their income. |
| OPT students' exemption from FICA taxes | OPT students are exempt from FICA taxes (Social Security and Medicare) for a certain period of time. |
| OPT students' residency status | OPT students' residency status affects their tax liability. |
| OPT students' tax forms | OPT students complete a W-4 tax form with their employer. |
| OPT students' tax deadline | The US tax deadline for OPT students in 2025 is April 15. |
| OPT students' tax refunds | OPT students can request a refund of Social Security/Medicare taxes withheld in error. |
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What You'll Learn
OPT students and income tax
OPT students are required to pay income tax on their earnings in the US. This applies to both OPT and OPT STEM extensions. OPT students are also required to complete a W-4 tax form with their employer.
OPT students are typically considered non-resident aliens (NRAs) for tax purposes if they have been in the US for less than five years. NRAs are not required to pay FICA tax (Medicare and Social Security taxes). However, if an OPT student has been in the US for more than five years, they may be considered a resident alien for tax purposes and may be liable for FICA taxes.
OPT students should be aware of their residency status to understand their tax obligations and claim any applicable reliefs or exemptions. For example, F-1 students on OPT may be able to claim a tax treaty that can partially reduce or fully exempt their income from taxes.
If an OPT student's employer withholds Social Security or Medicare taxes in error, the student can request a refund by contacting their employer or filing a claim with the Internal Revenue Service using Form 843 and Form 8316, along with supporting documents.
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$15.97
OPT students and FICA tax
F-1 students on OPT are required to pay taxes. However, as an F-1 visa holder, you are exempt from FICA (Social Security and Medicare) taxes. This means that no matter whether you are doing OPT, OPT extension, or CPT (Curricular Practical Training), you are exempt from paying Social Security and Medicare taxes unless you've been in the United States for more than 5 years.
FICA is the Federal Insurance Contributions Act, which includes Social Security and Medicare taxes. These are payroll taxes that are withheld from an employee's wages.
According to the Internal Revenue Service (IRS), foreign students in F-1, J-1, or M-1 nonimmigrant status who have been in the United States for less than 5 calendar years are generally considered nonresident aliens under IRC section 7701(b). These nonresident alien students are exempt from paying Social Security and Medicare taxes on their wages for services performed within the United States. To qualify for this exemption, the services performed must be allowed by USCIS for these nonimmigrant statuses and must be carried out to fulfil the purposes for which such visas were issued.
Additionally, Section 3121(b)(10) of the Internal Revenue Code provides another exemption from FICA taxes for all students, regardless of their US tax residency status. Under this exception, Social Security and Medicare taxes do not apply to services performed by students employed by the school, college, or university where they are enrolled at least half-time. The student's on-campus employment must be related to their course of study.
It is important to note that if you are an F-1 student on OPT and have been in the United States for more than 5 years, you may become a resident alien for tax purposes and may be liable for Social Security and Medicare taxes.
If you are an OPT student and believe you have been incorrectly charged FICA taxes, you can request a refund from your employer. If they are unwilling to provide a refund, you can file a claim for a refund with the Internal Revenue Service (IRS) using Form 843, Claim for Refund and Request for Abatement, along with other relevant documentation. This process can take several months, and you may need to wait at least 60 days before checking the status of your refund request.
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OPT students and non-resident alien status
OPT students on an F-1 visa who have been in the US for less than five years are generally considered non-resident aliens for tax purposes. Non-resident aliens are exempt from paying Medicare and Social Security taxes. However, if an OPT student has been in the US for more than five years, they will typically be considered a resident alien for tax purposes and will be liable for Medicare and Social Security taxes.
Non-resident Alien Status
According to the Internal Revenue Service (IRS), foreign students in F-1, J-1, or M-1 non-immigrant status who have been in the United States for less than five calendar years are generally considered non-resident aliens under the residency rules of IRC section 7701(b). These students are exempt from paying Social Security and Medicare taxes on wages earned for services performed within the United States. To qualify for this exemption, the services performed must be allowed by the USCIS for their non-immigrant status and must align with the purpose for which their visas were issued.
Resident Alien Status
On the other hand, F-1, J-1, or M-1 students who have been in the United States for more than five calendar years may become resident aliens for tax purposes if they meet the "Substantial Presence Test." At this point, they are generally liable for Social Security and Medicare taxes, unless they are exempt under the "student FICA exemption."
Refund of Erroneously Withheld Taxes
In cases where Social Security or Medicare taxes have been withheld in error from the wages of a non-resident alien student, the student can request a refund. The first step is to contact the employer who withheld the taxes and request a refund. If the employer is unwilling to provide a refund, the student can file a claim for a refund with the IRS using Form 843, Claim for Refund and Request for Abatement, along with Form 8316, Information Regarding Requests for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien.
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OPT students and Medicare tax refunds
OPT students on an F-1 visa are generally considered nonresident aliens for tax purposes during the first five calendar years they are present in the US. These students are exempt from Social Security and Medicare taxes on wages paid to them for services performed within the US. However, this exemption does not apply to F-1 students who become resident aliens.
If you are an OPT student and believe you have been subject to Medicare tax withholding in error, you can request a refund from your employer. Inform your employer of the exemption for nonresident alien students working on OPT, and ask them to issue a refund. If your employer is unwilling to provide a refund, you can file a claim for a refund with the Internal Revenue Service (IRS).
To file a claim for a refund with the IRS, you will need to complete and mail 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). Along with these forms, you must attach copies of the following documents:
- Form W-2 (to prove the amount of social security and Medicare taxes withheld)
- Copy of your visa
- Form I-94 (or other documentation showing your dates of arrival or departure)
- If you have a J-1 visa, Form DS-2019
- If you are engaged in optional practical training or employment due to severe economic necessity, Form I-766 or Form I-688B
- A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed, or a statement explaining why you are not attaching a statement from your employer
It is important to note that this refund application process is not quick and may take several months. Students are advised to wait at least 60 days before contacting the IRS to check the status of their refund request.
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OPT students and tax forms
OPT students are required to pay federal and state income taxes if they earn an income while in the US. OPT participants are generally not subject to FICA taxes (Social Security and Medicare contributions) until after the first five calendar years that they hold an F-1 nonimmigrant status.
F-1 students are considered nonresident aliens for tax purposes during the first five calendar years they are present in the US. Nonresident alien students are exempt from Social Security Tax and Medicare Tax on wages for services performed within the US. To qualify for the exemption, the services performed need to be allowed by USCIS for these nonimmigrant statuses, and such services must be performed to carry out the purposes for which such visas were issued.
On the other hand, if an OPT participant becomes a resident for tax purposes, they will need to complete a W-9 form and provide it to their employer. Additionally, OPT students must complete a W-4 tax form with their new employer when they start a new job.
If you are an OPT student, it is important to determine your residency status for tax purposes. This will help you claim any applicable reliefs. Familiarizing yourself with the forms can ensure that you are ready to update your withholding status when starting a new job.
- Form 843, Claim for Refund and Request for Abatement
- 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
- Form 8843
- Form 1040NR
- Form W-9
- Form W-4
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Frequently asked questions
OPT students are required to pay taxes on their wages. OPT students are also required to fill out a W-4 tax form with their new employer.
OPT students are exempt from paying Medicare taxes if they are considered non-resident aliens for tax purposes. OPT students in F-1, J-1, or M-1 non-immigrant status are exempt from paying Medicare taxes for the first five calendar years of their presence in the USA. After this period, they are considered resident aliens and are liable to pay Medicare taxes.
If an OPT student has already paid Medicare taxes, they can request a refund by contacting their employer and informing them of the exemption. If the employer is unwilling to provide a refund, the student can file a claim for a refund with the Internal Revenue Service using Form 843 and Form 8316, along with supporting documents.
