Students, teachers, and trainees working in the United States on F, J, M, and Q visas: to determine whether or not you must pay Federal Insurance Contributions Act (FICA) (social security) taxes on your income, you must first determine whether, in the eyes of the Internal Revenue Service (IRS), you are a resident or nonresident alien. All green card holders and some nonimmigrant (temporary) visa holders are considered resident aliens, and are required to pay FICA taxes. To qualify as an nonresident exempt from FICA taxation, you must fulfill a number of criteria. These criteria are outlined below. For more information, read Publication 519, U.S. Tax Guide for Aliens, posted online at the IRS web site, http://www.irs.gov/publications/p519/index.html.

Determination of Residency Status

Green Card Test- You are a U.S. resident for tax purposes if you are a lawful permanent resident of the United States at any time during the calendar year. This is known as the "green card" test. You generally have this status if the immigration agency has issued you an alien registration card, also known as a "green card." You continue to have resident status under this test unless the status is taken away from you or if you abandon your green card status.

Substantial Presence Test- You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States on at least:

1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
   a. All the days you were present in the current year, and
   b. 1/3 of the days you were present in the first year before the current year, and
   c. 1/6 of the days you were present in the second year before the current year

Exemptions to the Substantial Presence Test

Exempt individual- When applying the substantial presence test, do not count days for which you are an exempt individual. The term “exempt individual” does not refer to someone exempt from U.S. tax, but to anyone in the following categories (among others):

1. A teacher or trainee temporarily present in the United States under a J or Q nonimmigrant visa who substantially complies with the requirements of the visa.
2. A student temporarily present in the United States under an F, J, M, or Q nonimmigrant visa who substantially complies with the requirements of the visa.

Limitations on Exemptions to the Substantial Presence Test

Teachers and Trainees- A teacher or trainee is an individual, other than a student, who is temporarily in the United States on a J or Q nonimmigrant visa and who substantially complies with the requirements of that status. Any nonimmigrant temporarily present in the U.S. in J or Q status who is not a student is included within the definition of "teacher or trainee." For example, alien physicians, au pairs, and summer camp workers temporarily present in the U.S. in J nonimmigrant status are included within the IRS definition of "teacher or trainee."

You will not be an exempt individual as a teacher or trainee if you were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years. However, you will be an exempt individual if you were exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 preceding calendar years and:

1. A foreign employer paid all of your compensation during the current year.
2. A foreign employer paid all of your compensation during each of the preceding 6 years you were present in the United States as a teacher or trainee.

A foreign employer includes an office or place of business of a U.S. entity in a foreign country or a U.S. possession.

Students- A student is any individual who is temporarily in the United States on an F, J, M, or Q visa and who substantially complies with the requirements of that visa.

You will not be an exempt individual as a student if you have been exempt as a teacher, trainee, or student for any part of more than 5 calendar years, unless you establish to the satisfaction of the IRS that you do not intend to reside permanently in the United States, and you have substantially complied with the requirements of your nonimmigrant status. The facts and circumstances to be considered in determining if you have demonstrated an intent to reside permanently in the United States include, but are not limited to:

1. Whether you have maintained a closer connection to a foreign country, and
2. Whether you have taken affirmative steps to change your status from nonimmigrant to lawful permanent resident.

Nonresident FICA Taxation

Generally, services performed by nonresident aliens temporarily in the United States as a nonimmigrant [F,J,M, or Q student, teacher, trainee] are not covered under the social security program if the services are performed to carry out the purpose for which you were admitted to the United States. This means that there will be no withholding of social security or Medicare taxes from the pay you receive for these services. These types of services are very limited, and generally include only on-campus work, practical training, and economic hardship employment.

This exemption from social security and Medicare taxes also applies to employment performed under curricular practical training and optional practical training, on- or off-campus, by foreign students in F-1, J-1, M-1 or Q nonimmigrant status as long as the employment is authorized by the immigration agency. However, if an alien is considered a resident alien, that pay is subject to social security and Medicare taxes even though the alien is still in one of the nonimmigrant statuses mentioned above. This rule also applies to FUTA (unemployment) taxes paid by the employer.

Notes

If you qualify to exclude days of presence as a student, teacher, or trainee, you must file a fully-completed Form 8843, Statement for Exempt Individuals and Individuals with a Medical Condition, http://www.irs.gov/pub/irs-pdf/f8843.pdf with the IRS. If you are already filing an income tax return, attach Form 8843 to your income tax return. If you are not required to file an income tax return, you should mail Form 8843 to Internal Revenue Service Center, Philadelphia PA, 19255.

(date revised: 2/4/04)