FICA Tax Withholding

The F, J, and M Visaholder Exception

An individual can be exempt from FICA tax withholding if he or she is:

• a nonresident alien,
• present in the U.S. under an F-1, J-1, or M-1 category visa, and
• performing services in accordance with the primary purpose of the visa's issuance (i.e., the primary holder of the visa, the "-1" visaholder.)

A broad FICA tax exemption exists for all nonresident alien F, J, and M visaholders who are performing services to carry out the primary purpose of their visa. The term "nonresident alien" has the same meaning for FICA tax purposes as it does for income tax purposes; therefore, the FICA tax exemption is limited to those F, J, and M visaholders who qualify as "nonresident aliens" for tax purposes and who are performing services in accordance with the primary purpose of their visa.

As discussed in Section II, F, J, and M student visaholders are exempt from counting days of presence in the U.S. under the substantial presence test for five calendar years; J teacher, researcher and trainee visaholders are exempt from counting days for two calendar years. Once an individual counts 183 days of U.S. presence toward the substantial presence test, he or she is considered a resident alien for that entire calendar year and is subject to FICA tax retroactively to the beginning of the calendar year.

Example: If an F-1 student arrived in the U.S. on February 1, 1990, the student would be able to "exempt" five calendar years from counting days of presence in the U.S. (i.e., 1990, 1991, 1992, 1993 and 1994). The student would begin counting days of presence in the U.S. beginning on January 1, 1995, and would technically qualify as a U.S. resident for tax purposes on July 3, 1995; however, the student would be considered a resident alien retroactively to January 1, 1995, and would be subject to FICA tax as of that prior date.

In addition, in order to qualify for the FICA tax exemption, the nonresident alien's work must be "performed to carry out the purpose specified in" the F, J, and M visa. The individual will typically satisfy this requirement by being the primary visaholder (the "-1" visaholder); however, the spouse/dependents (the "-2" visaholders) will not meet this requirement because their employment does not "carry out the purpose" of the F-2, J-2 or M-2 visa. Therefore, the "-2" visaholders are not eligible for the FICA tax exception.

All FICA tax exemptions will be determined and monitored by International Human Resource Services based upon information provided by the individual on the Alien Information Collection Form and the individual's visa documentation. The individual must meet the three specifications as discussed above in order to qualify for the exemption. If the individual's visa expires, documentation of a visa extension must be provided to the International Human Resource Services Offce; if the necessary documentation is not provided, the FICA exemption will no longer apply.