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What is FICA tax?
FICA is a Federal Insurance Contribution Act. FICA tax is imposed on both employer and employee to fund Social Security and Medicare – Federal programs that provide benefits for retirees, disabled, and children of deceased workers.
Do I need to pay FICA tax?
As a nonresident alien and an exempt individual present in US on F, M, Q visas and who have been in US for 5 or less years are exempt from FICA tax.
After being present in the USA for longer than 5 years you are no longer exempt from FICA tax.
As a nonresident alien and an exempt individual present in US on J visa and who have been in US for 2 or less years are exempt from FICA tax.
After being present in the USA for longer than 2 years you are no longer exempt from FICA tax.
Different rules are applied for H and B visa holders.
If I am an exempt individual, how can I apply for FICA tax refund?
If you are an exempt individual, you would be able to request FICA tax withheld from your employer first. If your employer won’t do so, you can apply through IRS by filling From 843.
Tax From US will apply for refund of FICA tax to IRS on your request. Please use our user-friendly software in that case.
Who is resident/nonresident alien for tax purposes?
If you are a foreign national, you are considered either resident or nonresident alien for tax purposes. Tax From US software is specially designed to prepare nonresident tax returns. Our software will determine if you are resident or nonresident alien for tax purposes.
Also, you can educate yourself on this question by reading the information below.
Resident alien
As a legal US resident, you’re subject to the same tax rules as US citizens. This means that you must report all income you earn on annual tax return regardless of the country you earn it. When you prepare your tax return, you should use Form1040, or if eligible, Form 1040A or 1040EZ.
Nonresident alien
A nonresident pays income taxes to the IRS that’s effectively connected to the US, which generally includes the money you earn while in the US. The IRS has no authority to collect tax on the income that nonresidents earn in their home countries or in any foreign country. When you prepare your US tax return, you must use Form 1040NR or the shorter 1040NR-EZ, if eligible. Regardless of the form you use, you will only report amounts that are considered US source income. Just like resident for tax purposes, there are deductions and credits you can claim to reduce your taxable income.