Did you receive your paycheck for your salary and you are surprise because its amount is less than what you expected, FICA EE, did it keep part of your money? Is it normal that you lose a part of what you expected for your work? It does not mean that you lose part of your salary. But that the salary offered by your employer is tax deductible. As are the tips you may receive. It is your obligation to report it to the federal government in the tax return.
What does FICA EE refer to?
- FICA EE has to do with taxes that are withhold for Medicare and Social Security. It is the Federal Tax Law, the withholding is carry out according to the type of employee you are. For example foreign employee, resident or student.
- However, if you are a student, you do not pay FICA taxes, since the university is guide by the rules impose by the IRS and determines the withholding exemption for the student.
- If you want to be eligible for tax exemption, FICA as a student requires that you regularly attend classes and work with the goal of taking a course of study and being eligible.
- As an employee you may be eligible for the tax exemption if you meet a certain number of credit hours as a part-time student such as:
You will be eligible for the FICA waiver if you meet 6 credit hours for an undergraduate, 3 credit hours for a graduate student, one credit hour for a doctor of philosophy candidate, one credit hour for an advanced master’s candidate if you completed courses and work on a dissertation for credit or a thesis.
Are not eligible for the FICA exemption
- If you are a full-time employee working 40 hours a week.
- If you are a professional who works in the field of learning or science. You have advanced knowledge where the intellectual, judgment and discretion predominate.
- If you are a career employee eligible for a retirement plan, paid vacation, sick leave. You have life insurance or tuition benefits.
- If you are an intern, resident doctor and if you are a student, who is working from the beginning to the end of the academic period, in the latter case, when that academic period has its beginning and end in a payment period, that period is eligible for the exemption.
- If you are a student registering for the upcoming semester, you will be eligible for the FICA exemption as long as the break is at least 5 weeks.
- You are a student who works during the school break, for example in the summer for more than 5 weeks, you will not be eligible if you do not attend classes during the school break.
- If you are a student, you can make all the inquiries you need about the tax exemption by calling 612-624-8647 or 800-756-2363.
FICA EE and nonresident aliens
If you are a student or an academic who is temporarily in the United States. You have a Q-1, M1, J1 or F-1 visa, you will be exempt from US FICA taxes.
According to the IRS tax code and according to its section 7701 (b). You must be a non-resident to enjoy the exemption, therefore you must:
- Be the holder of a J-1 and F1 student visa in the first five calendar years.
- Being a fellow with a J1 visa corresponding to foreign doctors, researchers and professors in the first two calendar years.
- But it will not apply to spouses and children with a Q-2, M-2, J-2 and F2 visa.
- Under section 7701(b) of the Internal Revenue Code, the exemption does not apply to nonresident aliens. Who became resident aliens for tax purposes.
- It does not apply if you are a resident alien. Who changed to another visa status than Q-1, M-1, J-1 or F-1.
Keep in mind that the period of the calendar year according to what the IRS considers does not mean the 12 months of the year consecutively but rather that it begins on January 1 and ends on December 31, regardless of what time of the year you entered the country.
What is OASDI?
Old-Age, Survivors, and Disability Insurance (OASDI) is Social Security taxes such as disability insurance, survivors insurance, and is a withholding tax on gross earnings that is subject to a different wage limit each year. However, Medicare does not have a limit for your withholding.
What does FICA mean?
The insurance also offers funds directed to the health care system, institutions. That provide care to employees who lack health insurance and therefore cannot afford health treatment.
In this way they obtain social security benefits such as:
- OASDI: insurance for disability and survivors, old age insurance.
- Medicare which includes hospital insurance for the elderly.
- Throughout your working career you pay payroll taxes, which are associated with the annuity of social security benefits you will receive at retirement.
- For this reason, its definition defined as a tax is discussed because from it you obtain a right to collect in the future.
- However, most define it as a tax that is made up of Medicare and Social Security that are deducted as regulated by federal law.
- While by paying the social security tax you get benefits for your retirement, for your dependents, for disabled people, Medicare provides medical benefits to people over 65, people unable to work and their dependents and retired workers.
