The full meaning of ‘FICA’ is The Federal Insurance Contributions Act. The federal law requires employers to withhold the taxes from an employee’s earnings for the funding of the Social Security and Medicare activity or program. All these things together are called Federal Insurance Contributions Act (FICA) taxes. As an employer, the city has to pays a tax equal to the amount withheld from an employee’s earnings.
The FICA taxes never deductible on the income tax return. The employer portion of the FICA taxes is paid with the pre-tax dollars and that amount doesn’t increase your taxable income.
The students who are on CPT, OPT, STEM OPT are exempt from FICA Taxes that is Social Security and Medicare Taxes. It can be said in another way that you don’t have to pay FICA Taxes on your paycheck. Some of the employers would deduct those kinds of taxes from your paycheck.
But, you can also get a refund on FICA taxes from the IRS. This is the guide that will walk you through the instructions and additional details.
The time varies sometime to get the FICA refund. At first you have to attempt to get a refund from your employer before you file Form 843/8316. This is because, there is a manual review. Generally it takes at least 12 weeks for the IRS to process it, assuming your claim is accepted.
The most common time period is 16-20 weeks.
The FICA tax rate is the combination of two things like Social Security tax rate of 6.2% and the Medicare tax rate of 1.45% will be 7.65% for 2019 up to the Social Security wage base. Employees and employers usually pay the maximum Social Security tax will each in 2019 is $8,239.80. There is simple formula. That is:
The FICA tax = 6.2 % for the Social Security + 1.45 %for the Medicare tax
The students who are on F1 Visa and are working on OPT are Exempt from FICA Tax for a certain period. There is a simple example, if your salary is $50,000 per year, you will have $3,825 withheld from your paycheck for FICA taxes.
If somehow you have confirmed that you had FICA taxes incorrectly withheld, you have to follow some procedure. The things that you will need to do:
- You have to send a letter to your employer.
- Then you have to fill out and compile the following forms: Form 843, Form 8316, Form W-2, Form I-94, your visa documentation, and the employer letter.
- Lastly you have to mail in the combined packet to the IRS.
According to IRS you don’t have to pay FICA Taxes for F1 Visa, student until 5 years in USA. There is an employer’s payroll processing team who should be aware of this. If it does not work, don’t worry, you can educate them and ask them not to deduct FICA taxes from your paycheck.
The worst case is if they continue to deduct the FICA taxes, you can claim it back while filing your taxes in April or later.
You can also apply for FICA Tax refund via service provider SprinTax. You may inquire your employer to read the IRS site about FICA Taxes. If they deduct taxes on continuous basis, then you can request refund of FICA Taxes withheld from your paycheck back from IRS. There are two ways to apply for FICA Taxes paid during the OPT and STEM OPT Period.
- Use SprinTax to Prepare Forms
- Self-Prepare Required Forms
Use Sprintax for FICA Tax Refund
Usually FICA taxes are paid by the employer to the IRS. They generally don’t keep it with them after deducting from your paycheck. As a result, employer is going to ask you to get refund directly from the IRS. There is also an easy way to request refund using Sprintax. SprinTax will help you prepare all the required forms. Then you can print them. You can also add other forms provided by their checklist and mail to the IRS.
Self-Prepare FICA tax Refund Forms
You can follow the procedure to get FICA Taxes Refund. If there is a chance that the Social Security or Medicare taxes were withheld in error from pay, it will not be the subject to these taxes. Then you have to contact the employer who withheld the taxes for a refund.