What is the FICA Tax Refund?| North Loop Official Blog
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23 Nov 2020

What is the FICA Tax Refund?

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Introduction -

Everybody loves a refund on their taxes. But how do you get them? In this article, we will discuss the method by which you can get a refund on your FICA taxes and also other important points related to it. So, read on!

What is FICA tax and what does FICA stand for?

If you do not already know what is FICA tax, then let us begin by understanding what does FICA stand for. FICA is the abbreviation of the Federal Insurance Contribution Act, and FICA tax is a United States federal payroll tax administered to both employees and employers for funding Medicare and Social Security.

The Social Security and Medicare taxes that get withheld from your paychecks get collectively referred to as FICA tax. Your employer pays half of the taxes on your salary or wages, and you have to pay the remaining half. That is equal to 7.65% each for a total of 15.3%.

The Social Security portion of the FICA tax is subject to a cap of $137,700 in 2020 and $142,800 in 2021. That is also known as the ‘wage base’ and means you do not need to pay Social Security tax on any income above this amount. An exemption on these taxes is available for non-immigrant students, scholars, teachers, researchers, trainees and medical interns with certain visas.

It means that if you come to the United States on an F1 visa and work on a CPT/OPT, you can get a FICA refund from the Internal Revenue Service (IRS). However, that is possible as long as you remain a non-resident for federal income tax purposes and have been paying the taxes.

How much is FICA tax - FICA tax calculation:

So how much is FICA? Well, that can get calculated based on the following formula -FICA Tax

How to get the FICA refund for OPT students?

As per the IRS homepage, all non-resident aliens become liable for Social Security as well as Medicare taxes paid on wages. However, those with an F-1 visa, J-1 visa, M-1 visa and Q-1visa fall into a different category and get exempt from these taxes. Some others who do not have to pay the US Social Security and Medicare taxes include scholars, professors, teachers, trainees, researchers, physicians, and summer camp workers who are temporarily in the United States. All of them get exempt from the wages paid to them for services performed within the US.

Summary of FICA exemptions -

On-campus student employment (for up to 20 hours a week and 40 hours during summer vacations)

Off-campus employment (if it gets allowed by the USCIS)

PTS or OPT employment

Employment as a professor, teacher, or researcher

Employment as a physician or summer camp worker

So do you get FICA back on tax returns?

Before you start questioning ‘do you get FICA back on tax returns’, you should first determine which category your visa falls in. If you have an F-1, J-1, M-1 or Q-1 visa, you can claim a refund for the share of taxes withheld from your paychecks as long as you qualify as a non-resident alien taxpayer and get considered as substantially compliant with your visa. Also, to fulfil the necessary criteria for application, you should not be present in the US for more than five years.

What is FICA withholding?

Before we get into ‘what is FICA withholding’, here are some of the reasons why FICA taxes can get withheld by your employer -

You failed to provide correct documentation when you got hired.

You failed to provide a Social Security number or other necessary forms.

Some employers also do not know about the specific regulations regarding the exemption from paying Social Security and Medicare taxes for non-resident aliens who are in the US on visas specified above. That leads to erroneous withholding of FICA taxes.

In such cases, you can request your employer to refund the erroneously withheld FICA taxes and if a W-2 form is already issued, to give you a corrected Form W-2C for that year. If your employer refuses to refund the taxes, you can file Form 843 and the IRS will refund the money to you.

How to check your FICA tax refund status?

You can check your FICA tax refund status on the IRS website. You will have to enter your Social Security number, filing status, and the refund amount as shown on your tax return.

Filing status can be any one of the following -

Single

Married - Filing a joint return

Married - Filing a separate return

Head of Household

Qualifying Widow/Widower

Conclusion -

We hope this article helped in clearing some of your doubts about getting your FICA tax refund.

You can also read the other articles on our website about filling the Form DS 11, Form I-94, Form N 400 and others.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.