Claiming your social security and medicare tax refund for international students

International students who file as non-resident alien taxpayers are typically exempt from paying FICA taxes. But if you did not know about this before earning your paycheck, then you might have had these taxes withdrawn anyway. Luckily, you have up to three years to claim your social security and medicare tax refund for international students.

This article will help you determine if you were eligible and explain how to claim your FICA refund.

What is FICA?

The term FICA and payroll taxes are used interchangeably. They refer to two taxes taken out of most employees’ paycheck in the U.S.: social security and medicare. These taxes fund the country’s largest two entitlement programs.

The combined FICA tax rate paid by employees is 7.65%. This is comprised of 6.20% for Social Security taxes and 1.45% for Medicare.

This can result in a meaningful amount of money. For instance, someone making an annual salary of $125,000 will pay over $9,500 in payroll taxes. Even a summer intern making $15,000 will end up contributing $1,150 in FICA taxes.

The bottom line: FICA taxes add up to what we in the accounting industry call “real” money 😉

Who is exempt from payroll taxes?

The good news for some international students? You’re likely exempt from FICA taxes!

There are two key requirements to being exempt:

  1. You must meet the qualifications to file as a non-resident alien taxpayer. You can read more about the qualifications here. Most international students, unless on a green card, usually file as non-resident aliens.
  2. You must be working on an exempt visa type. The exempt visa types are: F,” “J,” “M,” or “Q”.

In our experience, most international students meet both requirements to be exempt from FICA.

How do international students claim their FICA tax refund?

If your employer withheld payroll taxes anyway, either because you filled out Form W-4 incorrectly or your employer was simply misinformed, it’s likely not too late to reclaim your FICA tax refund.

First, check how much social security and medicare payroll taxes were withheld by looking at your Form W-2. This form should have been sent to you by your employer shortly after the end of the year (in January or February). Box 4 lists the amount of “social security tax withheld” and Box 6 lists the amount of “medicare tax withheld”. Add those up to see how much you might be able to recover by claiming your FICA tax refund.

Once you’ve confirmed that you had FICA taxes incorrectly withheld, here is what you will need to do:

  1. Send a letter to your employer. Your employer will tell you that they already passed the money onto the IRS. But it’s a required step to get in writing.
  2. Fill out and compile the following forms: Form 843, Form 8316, Form W-2, Form I-94, your visa documentation, and the employer letter.
  3. Mail in the combined packet to the IRS.

Visor makes claiming your FICA tax refund simple

If the above sounds like a big hassle (and it probably does), you might want to let Visor help you out. It’s never fun dealing with the IRS alone, especially given that they’re not fans of refunding payroll taxes. We can help streamline the process of claiming your social security and medicare tax refund.

What are the benefits of working with Visor?

  1. We’ll provide a templated letter to send to your employer and make sure the letter they return to you will qualify.
  2. We’ll fill out Form 843 and Form 8316 for you then put together the rest of your documents into a nice refund request packet.
  3. We’ll send it into the IRS and help make sure they refund your FICA taxes.

We charge just $149 to reclaim each year’s FICA taxes. If you’re an existing client and we filed that year’s tax return, we only charge a reduced rate of $99.

Next Steps

If you have FICA taxes to reclaim, don’t delay any longer. Get the process started by contacting us at Visor. We’re a year-round tax service, so we’re ready to help you out today.

Visor is one of the leading tax providers for non-US citizens, particularly for international graduate students and other young professionals. Sign up and take comfort knowing all your tax needs are in expert hands.

 

Done filing taxes alone? New clients can prepay $99 to lock in your spot!

4 Comments

  1. Hello,
    Just wanted to know if some similar refund of social security and Medicare is available for H1 visa holders who returned to their countries for good.
    If you could point to relevant part of SSA documents that would be great!
    Thanks

    1. Hi Ratnadeep – Great question! Unfortunately, we are only able to go back three years when amending tax returns. That means that you can still claim a refund for 2015 FICA withholdings, but it would be too late for 2014. Reach out to a Visor tax advisor though so we can review your eligibility and help reclaim your taxes if eligible!

Leave a Reply

Your email address will not be published. Required fields are marked *