Social Security & Employer Withholding
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How do Foreign Nationals Obtain a Refund?
If your employer mistakenly withheld FICA from your wages (see box 4 of your W-2), ask your employer for a refund first. If your employer denies the refund, you can claim it from the IRS on Form 843. Follow the instructions in Chapter 8 of IRS Publication 519. You can print both Form 843 and Publication 519 from the U.S. Treasury’s Forms and Publications site.
When you file, attach IRS Form 8316, a statement from your employer (if possible), a copy of your W-2, visa, CBP Form I-94, INS Form I-538 (if you have one), and a statement saying, “My employer withheld tax by mistake and denied me a refund.” Send this packet separately from your tax return to:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301-0215
U.S.A.
Social Security Tax and Totalization Agreements
If you temporarily live in the U.S. for work or study and do not qualify for a Social Security tax exemption, your contributions may still provide benefits in your home country under a “totalization agreement.” The U.S. has negotiated these agreements with several countries. To learn more and see which countries participate, visit the Social Security Administration’s Office of International Programs site.
How To Get Your Employer To Withhold the Proper Amount
If you checked your country’s treaty with the U.S. and qualify for a treaty exemption on your wages or scholarship income, you must file IRS Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, with the payor of the exempt income.
You must also attach a statement showing why you qualify for the treaty exemption. You can find sample statements for each treaty country in IRS Publication 519, Appendix A (for students) and Appendix B (for teachers and researchers). Download Form 8233 and Publication 519 from the U.S. Treasury’s Forms and Publications site, or call 1-800-TAX-FORM (1-800-829-3676) to request copies by mail.
Do Foreign Nationals Pay Social Security and Medicare Tax?
Nonresident aliens who hold F-1, J-1, M-1, or Q-1 visas do not pay Social Security and Medicare taxes (FICA) on services they perform to carry out the purpose for which the U.S. admitted them [IRC sec. 3121(b)(19)]. This exemption generally applies to on-campus work authorized on Form I-94 (Arrival and Departure Record) or Form I-20 (Certificate of Eligibility for Nonimmigrant Student Status).
A nonresident alien student in the U.S. cannot work off campus for a wage or engage in business unless the U.S. Citizenship and Immigration Services (CIS) approves the employment. The student’s copy of Form I-20 or Form I-688B, Employment Authorization Document, usually shows this approval. The IRS recognizes off-campus work due to severe economic necessity or optional practical training as qualifying for the exemption. The IRS does not recognize other off-campus work by nonresident alien students as consistent with the purpose of a student visa.
Resident aliens, as well as nonresident aliens holding F-2, J-2, M-2, Q-2, or any other visa types, must pay FICA taxes. However, IRC section 3121(b)(10) exempts services performed for a school, college, or university if the student performing the services is enrolled and regularly attending classes at that institution.
International Students
International students who do not qualify for the exemption for nonresident aliens may qualify under this student provision. On the other hand (to complicate matters further), the law lets states provide Social Security coverage for student services performed at the public school the student attends under agreements with the Social Security Administration.
If a state has chosen to cover student services, section 3121(b)(10) of the Code removes the student FICA exception for those services. To read the official IRS announcement on who may qualify for this exemption, see Rev. Proc. 98-16.