Am I still exempt from FICA taxes as an F1 student on OPT? Confused about 5-year exemption rule

Thanks for the info! So if I'm understanding right, even though OP first came in January 2020, they count all of 2020 as year 1, not January 2020 to January 2021? So the 5 years would be 2020-2024, not from the exact date they arrived? I'm asking because I'm in a similar situation but arrived in August 2021.

Yes, that's correct. For FICA tax exemption purposes, the IRS counts calendar years, not 365-day periods from your arrival date. So for someone arriving in January 2020, the five calendar years would be 2020, 2021, 2022, 2023, and 2024. The exemption would end on December 31, 2024, making you subject to FICA starting January 1, 2025. For your situation, arriving in August 2021, your five calendar years would be 2021, 2022, 2023, 2024, and 2025. You would become subject to FICA taxes starting January 1, 2026.

Thank you so much for the detailed explanation! That's a relief to know my understanding matches how it actually works. Just to confirm one more thing - the fact that I'm on OPT and going to STEM OPT doesn't change anything about the 5 calendar year calculation, right? I'll still be exempt through December 31, 2024?

That's right. As long as you maintain your F1 status (which includes OPT and STEM OPT periods) and you're still considered a nonresident alien for tax purposes, your FICA exemption continues through the end of the 5th calendar year, so through December 31, 2024 in your case. The transition from regular OPT to STEM OPT doesn't affect this timeline since both are considered part of your F1 status.

Did it cost anything to use? And how accurate was it? My employer is saying I should be paying FICA taxes now even though I've only been here for 3 years on my F1, and I'm getting so frustrated trying to explain the exemption to them.

This sounds interesting but I'm skeptical. My international student advisor gave me completely different information than the payroll department at my internship. How does this compare to just asking the international student office at your university?

It was definitely worth it for the peace of mind and accuracy. With the documentation it generated, I was able to show my employer exactly how the exemption applied to me, and they corrected my withholding right away. As for comparing it to university advisors, I found it more helpful because it's specifically focused on tax issues. My university's international office was great for visa questions, but they typically gave very general tax advice and often told us to consult a tax professional for specifics. This tool gave me the specifics without having to pay for a full tax consultation.

Does that actually work? I've been trying to call the IRS for 3 weeks about this exact issue and keep getting disconnected after waiting for 1+ hour. How can they get you through when the IRS line is always busy?

This sounds like a scam. Why would I pay a third party to call a government agency? The IRS has a specific international taxpayer line that's supposed to be less busy than the main number.

It absolutely works, and it's not magic - they use technology to continuously redial and navigate the IRS phone tree until they get a human, then they call you to connect. It saved me hours of frustration and hold music. The international taxpayer line can be helpful for some issues, but in my experience, they often redirect you to the main line for specific tax questions about employment taxes. I tried both before using Claimyr. The international line told me they couldn't help with my FICA exemption questions and I needed to speak with someone in a different department.

That's a really good point! I definitely know I need to pay federal income tax - I've been filing tax returns since I started studying here. It's just the FICA (Social Security and Medicare) taxes that I'm concerned about. My W-2 from my previous employer correctly had zeros in boxes 4 and 6 for Social Security and Medicare tax withheld, so I want to make sure my new employer does the same.

Exactly! You've got it right. Just make sure your new employer has the proper documentation on file. Usually they should have you complete Form 8233 (Exemption From Withholding for Nonresident Aliens) specifically for the FICA exemption, along with documentation of your entry date to the US in F1 status. That way they'll know exactly when your exemption ends in December 2024.

Wait this is confusing. So are you saying even if OP is within the 5 calendar years on F1, they might still have to pay FICA because of the substantial presence test? How would they know if this applies to them?

The substantial presence test generally won't affect most F1 students within their first 5 calendar years because the IRS specifically excludes days present in the US as an "exempt individual," which includes F1 students during those first 5 years. After the 5 years, F1 students start counting days toward the substantial presence test. If they meet the test (generally present for 183 days in the current year or using the formula across 3 years), they become resident aliens for tax purposes and would be subject to FICA taxes. For OP's situation, since they're still within their 5 calendar years and have maintained F1 status the whole time (including OPT), they should still be exempt from FICA through December 2024.

This is really helpful context about budgeting for the change! I hadn't really thought about the practical impact of suddenly having 7.65% more taken out of my paycheck. That's actually a pretty significant amount when you're on an entry-level salary. Your point about keeping good records is spot on too. I've already had to explain the exemption to two different people in my current company's payroll department, so I can imagine having to do it all over again if I switch jobs. Having everything documented and organized will definitely save time and headaches. One question - when you started paying FICA taxes, did you notice the Social Security credits showing up on your Social Security statement? I'm curious about how that works for someone who might eventually apply for permanent residency but isn't sure about staying in the US permanently.

Yes, the Social Security credits do start showing up once you begin paying FICA taxes! You can create an account at ssa.gov to view your Social Security statement online and track your earnings record. Each year you work and pay Social Security taxes, you earn up to 4 credits (you need $1,640 in covered earnings per credit in 2023). For someone in your situation who might pursue permanent residency, those credits can be valuable. You generally need 40 credits (10 years of work) to qualify for Social Security retirement benefits. Even if you leave the US temporarily, your credits stay on your record, and you can continue earning credits if you return to work in the US later. Also worth noting - if you do become a permanent resident or citizen later, you won't be able to get Social Security credits for the years you were exempt from FICA as an F1 student, even if you end up staying long-term. So while the exemption saves you money in the short term, there is that trade-off to consider for long-term planning. I'd recommend checking your Social Security statement annually once you start paying in, just to make sure your earnings are being recorded correctly. Mistakes can happen, and it's easier to fix them sooner rather than later.

Yes, the Social Security credits do show up on your statement! I check mine annually on the SSA website, and you can see the earnings and credits accumulating from when you start paying FICA taxes. Each year you can earn up to 4 credits (you need $1,640 in covered earnings per credit in 2023, so $6,560 total for all 4 credits). For Social Security retirement benefits, you generally need 40 credits (10 years of work), but even if you don't hit that threshold, the credits don't disappear. If you leave the US and come back later, or if you end up on a different visa status that allows FICA contributions, those credits will still be there. There are also totalization agreements between the US and many countries that can help coordinate benefits if you split your working years between countries. So even if you're not sure about staying permanently, those FICA contributions aren't necessarily "lost" - they could benefit you down the road depending on your situation. The Medicare portion is a bit different - you become eligible at 65 if you have at least 40 quarters of coverage or if your spouse does. But honestly, these are good problems to think about since it means you're building a financial foundation in the US!

Yes, the Social Security credits do start showing up on your statement once you begin paying FICA taxes! You can create an account at ssa.gov to track your earnings and credits. You earn one credit for every $1,730 in covered earnings (as of 2024), up to a maximum of four credits per year. For someone in your situation considering permanent residency, those credits can be valuable. You need 40 credits (10 years of work) to be eligible for Social Security retirement benefits. If you end up getting a green card and staying long-term, those credits will count toward your eligibility. Even if you leave the US, you might still be able to collect benefits later depending on your home country's totalization agreement with the US. The Medicare portion of FICA also counts - you need the same 40 credits to be eligible for premium-free Medicare Part A if you become a permanent resident or citizen later. So even though it feels like money disappearing from your paycheck now, it's actually building toward potential future benefits. I'd recommend checking your Social Security statement annually once you start paying in, just to make sure your earnings are being recorded correctly. Sometimes there can be issues if your name or Social Security number gets entered incorrectly by payroll systems.

Yes, the Social Security credits definitely show up on your statement! You can create an account at ssa.gov to track your earnings and credits. You need 40 credits (basically 10 years of work) to be eligible for Social Security benefits, and you earn up to 4 credits per year based on your earnings. Even if you're not sure about staying permanently, those credits don't disappear. If you leave the US and come back later, or even if you retire abroad, you may still be eligible for Social Security benefits depending on your total credits and any tax treaties between the US and your home country. Some countries have totalization agreements with the US that can help coordinate benefits. It's actually kind of nice to see those contributions building up, even though it felt painful at first to see that money coming out of my paycheck! Just make sure to check your Social Security statement annually to ensure your earnings are being recorded correctly.

Yes, the Social Security credits do show up on your statement! I started checking my Social Security account online (you can create one at ssa.gov) after I began paying FICA taxes, and you can see your earnings history and credits accumulating each quarter. For Social Security benefits, you generally need 40 credits (about 10 years of work) to be eligible for retirement benefits. Even if you end up leaving the US, those credits stay with you. If you return later or meet certain requirements, you might still be able to claim benefits. Some countries also have totalization agreements with the US that can help coordinate benefits between countries. The Medicare credits work a bit differently - you need 40 credits for premium-free Medicare Part A, but since Medicare is primarily for people living in the US, it's less relevant if you're planning to leave permanently. From a financial planning perspective, even if you're unsure about staying permanently, paying into Social Security isn't necessarily "lost money" - it's building a safety net that could benefit you later, especially if your plans change or you decide to pursue permanent residency down the line.

Yes, the Social Security credits do start showing up on your statement once you begin paying FICA taxes! You can create an account at ssa.gov to track your earnings and credits. You need 40 credits (roughly 10 years of work) to be eligible for Social Security benefits, and you can earn up to 4 credits per year based on your earnings. The interesting thing is that even if you eventually leave the US, those credits don't disappear. If you come back later or if your home country has a totalization agreement with the US, you might still be able to benefit from those contributions. Countries like the UK, Canada, Germany, and many others have these agreements that can help coordinate benefits. For someone on the path to permanent residency, every quarter you pay into the system counts toward your future benefits. Even if you're unsure about staying permanently, it's worth keeping track of your Social Security statement annually to make sure your earnings are being recorded correctly. I've found it oddly satisfying to see those credits accumulate! Just remember that the amount of your future benefits will depend on your highest 35 years of earnings, so early career years (which tend to be lower salaries) can be replaced by higher-earning years later if you stay in the US long-term.

Yes, the Social Security credits do show up on your Social Security statement once you start paying FICA taxes! You can create an account at ssa.gov to track your earnings and see how many credits you've accumulated. For Social Security benefits, you generally need 40 credits (about 10 years of work) to be eligible for retirement benefits. Each year you work and pay FICA taxes, you can earn up to 4 credits. The good news is that even if you eventually leave the US, those credits don't disappear - they stay on your record. If you later become a permanent resident or citizen, all those credits count toward your eventual Social Security benefits. And interestingly, the US has Social Security agreements (totalization agreements) with many countries, so depending on where you're from, your US credits might even help you qualify for benefits in your home country or vice versa. It's actually kind of nice to see those credits start accumulating on your statement - makes the FICA taxes feel a bit less painful when you realize you're building toward something, even if your long-term plans are still uncertain!

Yes, the Social Security credits do show up on your Social Security statement once you start paying FICA taxes! You can create an account on ssa.gov to track your earnings and credits. You need 40 credits (generally 10 years of work) to be eligible for Social Security retirement benefits. The interesting thing is that even if you eventually leave the US, those credits don't disappear. If you return to work in the US later or if your home country has a totalization agreement with the US, you might still be able to use those credits toward benefits. Countries like the UK, Canada, Germany, and many others have these agreements. For someone considering permanent residency, having that work history and Social Security credits can actually be beneficial - it shows your integration into the US system and your contribution to Social Security. Plus, if you do get a green card and stay long-term, you'll be building toward eventual retirement benefits. I'd recommend checking ssa.gov periodically once you start paying in to make sure your earnings are being recorded correctly. It's much easier to fix any discrepancies while they're recent rather than years later!

Yes, the Social Security credits do show up on your statement once you start paying in! I check my Social Security statement online every year (you can create an account at ssa.gov), and you can see exactly how much you've paid in and how many credits you've earned. You need 40 credits total to be eligible for Social Security retirement benefits, and you can earn up to 4 credits per year based on your earnings. So even if you're not sure about staying permanently, those credits don't disappear - they stay with your Social Security number forever. If you do end up leaving the US and coming back later, or even if you retire abroad, you might still be able to collect Social Security benefits depending on your situation and any totalization agreements between the US and your home country. It's actually not a bad deal in the long run, especially considering that your employer matches your contributions, so you're effectively getting a 6.2% bonus toward your retirement savings that you wouldn't have gotten while exempt from FICA. The Medicare taxes you pay also count toward future Medicare eligibility if you end up staying and becoming a permanent resident or citizen later on.

Yes, the Social Security credits definitely show up on your statement! I check mine annually online at ssa.gov, and you can see exactly when your contributions started. Each year you pay FICA taxes, you earn up to 4 Social Security credits (you need $1,640 in covered earnings for each credit in 2023, so $6,560 total for the maximum 4 credits per year). You need 40 credits total (10 years of work) to be eligible for Social Security retirement benefits. The good news is that even if you leave the US and come back later, or eventually become a permanent resident, those credits stay with you forever. I've met people who worked in the US for a few years on H1B, moved back home, then returned decades later and were still able to claim their benefits. There are also totalization agreements with many countries that can help coordinate benefits between the US Social Security system and your home country's system, so the contributions aren't necessarily "lost" even if you don't stay in the US permanently. Definitely worth looking into if you're from a country that has one of those agreements with the US. The 7.65% does sting at first, but knowing it's going toward something you might actually benefit from later makes it feel less like money disappearing into the void!

Thanks for mentioning the university international student services office as a resource! That's such a practical tip that I hadn't thought of. I bet they deal with this exact question all the time and probably have standardized documentation that makes it much easier for employers to understand. Setting up the mySSA account early is also really smart advice. I've been putting that off, but it would be good to have it ready to go before I start paying in. Plus, it'll be interesting to see how the credits accumulate over time, especially since I'm not sure yet whether I'll end up staying in the US permanently or eventually moving back home. The budgeting reality is definitely something I need to start planning for now. 7.65% might not sound like much, but on a typical OPT salary, that's a pretty significant chunk of change each month. Better to start adjusting my spending expectations now rather than getting a shock in January! It's reassuring to know that others in the same timeline are going through this exact same process. Makes me feel more confident that I understand the rules correctly.