What is the FICA Tax Refund? How to Maximize your Refund

This article was written for OPT students that want to get a refund on their FICA taxes. Keep reading to learn how to get some extra money back after a year of hard work!

What is FICA?

FICA is the abbreviation of the Federal Insurance Contribution Act. The FICA tax is a United States federal payroll tax administered to both employees and employers to fund Medicare and Social Security.

This means that when you come into the United States on an F1 visa and work on a CPT/OPT, you can get a FICA tax refund from the Internal Revenue Service (IRS) if you’ve been paying these taxes.

How is the FICA tax calculated?

The formula that makes up the FICA tax is simple:

FICA Tax = 6.2% for Social Security + 1.45% Medicare tax

Normally, international students that come to the United States to do their OPT are exempt from the FICA tax for a certain period of time. Check with your employer before starting to work to see if you are exempt from these taxes or not. Then, you can see the contribution you will have to make to FICA as well as see how much you can expect to get on your tax return at the end of the fiscal year.

For instance, imagine you earn a salary of $50,000 per year. The amount of FICA tax deducted from this salary (that you and your employer will have to pay) comes out to about $4000, which is quite a lot. Let’s say you weren’t aware that you were paying these taxes and you just found out. What can you do and what does it mean? Did the money just disappear? Before we get to the hard questions, we are going to have a look at the rules of OPT and FICA taxes.

OPT Rules in the United States — FICA Taxes

What is the FICA OPT Exemption?

According to the IRS, if you are on an F1 visa, you do not have to pay FICA Taxes as a student for up to 5 years.

Make sure that before you start your new job, you talk through this topic with your manager so he can coordinate it with the payroll processing team. The payroll processing team should know about this and they should also know how to handle it. However, if they don’t know anything on the topic, tell them to not deduct the FICA taxes from your salary.

What happens when if they have already deducted FICA taxes from your salary?

If your employer did not deduct FICA taxes from your salary, do not worry about not getting this money back. This article is here to help you!

First, you need to know that you can claim back these deductions when you file for taxes in April. In order to do so, you have to apply for a FICA tax refund at the service provider “Sprint Tax.” Sprint Tax is an online tax prep solution for international students and scholars. Take a look at their homepage if you want to learn a bit more. Having done that, you need to follow the procedure on the website of getting a FICA tax refund from the IRS.  You can find all the information you need regarding this topic on their homepage.

Getting the FICA refund: for OPT students

According to the IRS Homepage, all nonresident aliens are liable for Social Security, as well as Medicare Taxes paid on wages. However, there are certain exceptions for people with F-visas, J-visas, M-visas, and Q- visas. Furthermore, others exempt from paying US Social Security and Medicare taxes include scholars, professors, teachers, trainees, researchers, physicians, au pairs, summer camp workers, and other aliens that are temporarily in the United States on such visas.

All of these are exempt from wages paid to them for services they performed within the United States, but only as long as such services are allowed by the USCIS.

FICA exemptions include work such as:

• On-campus student employment for up to 20 hours a week and 40 hours during summer vacations.
• Employment off-campus (if it is allowed by the USCIS)
• PTS or OPT employment
• Employment as a professor, teacher, or researcher
• Employment as a physician, au pair, or summer camp worker

FICA Tax Refund Error

In case your taxes cannot be refunded and they are withheld due to an error your employer made, you need to get in contact with your employer and ask them for details on the situation. If you won’t be getting a full refund from your employer, you need to file a claim with the IRS.

In order to file that claim, you need to fill out Form 843. The 843 form is the Claim for Refund and Request for Abatement. You can simply download this file as a PDF from their homepage. Additionally, you need to attach the following documents:

Documents needed for 843 Form

• A copy of your W-2 form to prove the amount of Social Security and Medicare taxes that have been withheld
• A copy of your passport showing the page with the visa stamp
• INS Form I-94
• If applicable, the INS Form I-538 (Certification by Designated School Official)
• 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 that you authorized your employer to claim). If you cannot obtain this statement from your employer, you must provide this information on your own statement and explain why you are not attaching a statement from your employer.
• If applicable, Form 8316, which is the Information Regarding Request for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, or M Type Visa (PDF)

The last thing you need to do to get your money back is making sure you go to the same IRS office where your employer’s forms 941 returns were filed.

That should be it! We hope this article cleared up any worries you had about getting your tax refund. We wish you the best of luck on your tax return filing process and expect you to get extra cash back so you can splurge on something for all of your hard work!

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

See author's posts