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Victoria Brown

Do I still pay Social Security and Medicare tax on US stock income as a non-resident who was on F1 visa?

I originally worked in the US for about 3 years on an F1 visa before relocating to Canada after my visa expired. While I was working in the States, my employer granted me some stock options as part of my compensation package. Now that I'm living in Canada, these stocks are starting to vest, which means I'm still getting US-based income even though I'm no longer physically there. I know I have to pay some kind of tax on this stock income to the US government, but I'm confused about which taxes apply. When I was on my F1 visa in the US, I didn't have to pay Social Security or Medicare taxes on my regular income (I believe this was some kind of exemption for F1 visa holders). But now I'm wondering if these same exemptions apply to my current situation with the stock vesting, or if the rules are different since I'm now a non-resident living in another country. Does anyone know if I need to pay Social Security and Medicare tax on this stock income? Or do I just need to pay regular income tax? The tax forms are really confusing me.

This is a good question about international taxation. For your stock vesting situation, you generally don't have to pay Social Security and Medicare taxes (collectively known as FICA taxes) on this income as a non-resident alien who previously held an F1 visa and is now living outside the US. The exemption you had as an F1 student for FICA taxes typically continues to apply to this kind of income. The stock vestings are considered US-source income for income tax purposes, so you'll need to file a US non-resident tax return (1040-NR) to report this income, but the FICA taxes wouldn't apply in your case. The key here is that you're no longer providing services in the US, and the stock is vesting based on your prior work when you were exempt from these taxes. Make sure you're properly classifying yourself as a non-resident alien on all your US tax documents.

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Thanks for the info! I'm actually in a similar situation but worked on an H1B visa instead of F1. Does the same exemption apply or do H1B holders have different rules for stocks vesting after leaving the US?

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H1B visa holders generally don't have the same FICA tax exemptions that F1 visa holders do. While on an H1B, you would have been paying into Social Security and Medicare. For stock vestings that occur after you've left the US, the treatment depends on several factors including the nature of the compensation, when it was earned, and tax treaties between the US and your current country of residence. In many cases, if you're no longer providing services in the US, the stock vesting might not be subject to FICA taxes, but you should consult with a tax professional familiar with cross-border compensation issues to be certain in your specific situation.

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After struggling with a similar international tax situation last year, I discovered a tool that really helped me figure out my tax obligations. Check out https://taxr.ai - it's an AI system that can analyze your specific situation with US sourced income after leaving the country. I uploaded my stock documents and answered a few questions about my visa history, and it clarified exactly what I needed to pay. The tool explained that my stock vesting after leaving the US was subject to income tax but not Social Security/Medicare taxes, and showed which forms I needed to file. It even explained the specific IRS rules that applied to my situation.

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JaylinCharles

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How accurate is this tool with international tax treaties? I'm now in Australia with vesting US stocks and I'm completely lost with the paperwork.

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Does it help prepare the actual tax forms or just tell you what you owe? I don't mind paying for advice but I need help with the actual filing too.

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The tool handles international tax treaties pretty well - it asks which country you're residing in and applies the relevant treaty provisions. For Australia specifically, it addresses the US-Australia tax treaty provisions that impact how your stock income is taxed. It helped me understand which country has primary taxing rights for different types of income. As for tax form preparation, it doesn't complete the forms for you, but it provides detailed guidance on which forms you need to file and how to report your income on those forms. It breaks down which sections of each form apply to your situation and gives step-by-step instructions. I found this guidance really helpful when I was filling out my 1040-NR and accompanying schedules.

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JaylinCharles

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Just wanted to follow up - I tried https://taxr.ai after seeing this recommendation and it was super helpful! I uploaded my stock grant documents and answered questions about my visa history, and it confirmed I don't owe FICA taxes on my vested shares. It explained exactly how the US-Australia tax treaty impacts my situation and showed me how to properly report this on Form 1040-NR. The tool even identified a foreign tax credit I can claim in Australia for taxes paid to the US. Saved me at least $1200 in unnecessary tax payments and probably $800 in accountant fees. Thanks for the suggestion!

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Lucas Schmidt

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If you need to contact the IRS about this situation, good luck getting through on the phone! After trying for weeks to get clarification on my own international stock vesting situation, I found a service called Claimyr that actually got me through to a real IRS agent. You can check them out at https://claimyr.com - they basically hold your place in the IRS phone queue and call you when an agent is about to answer. I wasted so much time trying to call directly before finding them. There's a demo video at https://youtu.be/_kiP6q8DX5c that shows how it works. When I finally spoke with an IRS agent, they confirmed that as a former F1 visa holder now living abroad, I didn't need to pay FICA taxes on my stock vestings. Having that official confirmation gave me peace of mind when filing.

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Freya Collins

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How does this even work? Seems sketchy to have a third party involved when dealing with the IRS. Did you have to give them personal info?

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LongPeri

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No way this actually works. I've been trying to reach the IRS for months and I'm convinced they don't even have real people working there anymore. Just an endless maze of automated messages.

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Lucas Schmidt

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It works by using technology to navigate the IRS phone system and hold your place in line. You don't need to give them any personal tax information - you just provide your phone number so they can call you when an agent is about to pick up, then they connect you directly. They never hear your conversation with the IRS. I was definitely skeptical too! But I was desperate after trying to call the IRS myself for weeks. The wait times are insane, especially for international tax questions. When they connected me, I was speaking directly with an actual IRS agent who answered all my questions about stock vesting and FICA tax obligations. It saved me literally days of time trying to get through the phone system myself.

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LongPeri

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I'm eating my words from earlier. After continuing to fail getting through to the IRS myself, I tried that Claimyr service and they actually got me connected to an IRS representative in about 2 hours. I didn't have to sit by the phone - they just called me when they were about to connect me. The IRS agent confirmed exactly what others here said - as a former F1 visa holder now living outside the US, stock vestings from US employers aren't subject to Social Security and Medicare taxes. They also explained I need to file Form 1040-NR and include the stock income on Schedule NEC. Definitely worth using the service instead of wasting more weeks trying to call myself.

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Oscar O'Neil

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One thing to consider - check if there's a tax treaty between the US and Canada. These treaties can significantly impact your tax situation. I believe the US-Canada tax treaty has specific provisions about investment income that might help prevent double taxation. You'll likely need to file Form 8833 to claim treaty benefits.

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Thanks for mentioning this! Do you know if I would file the treaty form with both countries or just with my US return? And would the stock vesting be considered investment income or employment income under the treaty?

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Oscar O'Neil

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You'll need to file Form 8833 (Treaty-Based Return Position Disclosure) with your US tax return (Form 1040-NR) to claim the treaty benefits. On the Canadian side, you would report this income on your Canadian tax return and typically claim a foreign tax credit for any US taxes paid to avoid double taxation. Regarding your second question, stock vestings are generally considered employment income, not investment income, because they were granted as compensation for your work. Under the US-Canada tax treaty, employment income is usually taxed based on where you physically performed the services. However, since these stocks were earned while you were in the US but are vesting now while you're in Canada, it creates a more complex situation where both countries may have partial taxing rights.

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Has anyone used TurboTax for this kind of situation? I have a similar issue with RSUs vesting after leaving the US and I'm wondering if regular tax software can handle it or if I need to hire a specialist.

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In my experience, TurboTax struggles with complicated international situations. I tried last year with a similar stock vesting scenario and ended up hiring a cross-border tax specialist. Cost me $750 but they found deductions that saved me over $3000, so definitely worth it.

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Ryder Greene

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I went through this exact situation last year! As a former F1 visa holder now living in Canada, I can confirm that you typically don't need to pay Social Security and Medicare taxes on stock vestings that occur after you've left the US. The key points for your situation: 1. You'll need to file Form 1040-NR as a non-resident alien 2. Report the stock vesting income, but FICA taxes generally don't apply since you're no longer providing services in the US 3. Definitely look into the US-Canada tax treaty provisions - you may be able to claim treaty benefits to reduce your US tax burden 4. On your Canadian return, you'll report this as foreign income and can likely claim a foreign tax credit for any US taxes paid The stock vesting is considered compensation for work you performed while in the US, but since you had the F1 FICA exemption when you earned it, that exemption typically carries forward. Just make sure you're properly documenting your non-resident status and the dates when you left the US. I'd recommend keeping detailed records of when you left the US, your visa status history, and all stock vesting documents. This will be helpful if you ever need to explain your tax position to either the IRS or CRA.

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This is really helpful! I'm new to dealing with international tax issues and this community has been a lifesaver. Quick question - when you mention "properly documenting your non-resident status," what specific documents should I be keeping? I have my I-94 departure record and my last paystub from the US, but I'm not sure if there's anything else I should be maintaining for tax purposes. Also, did you run into any issues with the CRA when reporting this as foreign income? I'm worried about how to properly convert the USD amounts and whether there are any specific forms I need to file on the Canadian side.

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