- Employers Must Withhold FICA Taxes for Students who Change Status to H-1B Starting October 1
- October 1, 2015
- Law Firm: Mintz Levin Cohn Ferris Glovsky Popeo P.C. - Boston Office
- As students and scholars’ status change from F-1, J-1 or other FICA exempt statuses to H-1B starting October 1, these employees will become subject to FICA taxes upon the effective date of their H-1B status.
All employers and employees are required to pay social security and Medicare taxes. However, the Internal Revenue Code and the Social Security Act provide an exemption for students, scholars, teachers, researchers, trainees, physicians, au pairs, and summer camp workers in F-1, J-1, M-1, Q-1 or Q-2 non-immigrant visa status. However, as these employees’ convert to an H-1B upon status, employers must commence the withholding of FICA taxes.
As most H-1B change of statuses will become effective October 1, 2015, employers are advised to confirm with payroll departments or third-party payroll processors that each employee’s FICA withholding is reflected on his/her pay stub from the effective date of his/her H-1B status.