Payments not subject to FICA taxes | FICA Tax Refund
FICA doesn’t apply to all types of pay. Here are a few of the more common types of payments to employees that aren’t subject to FICA tax withholding:
- Wages paid after the worker’s death
- Wages paid to a disabled worker after becoming eligible for Social Security disability insurance benefits
- Most civilian federal government employees hired before 1984 (they are covered by and pay the 1.45% tax for Medicare but not for Social Security retirement benefits)
- About 25% of state and local government employees with a pension plan
- International students, scholars, professors, teachers, trainees, researchers, physicians, au pairs, summer camp workers, and other aliens temporarily present in the United States in F-1, J-1, M-1, or Q-1/Q-2 nonimmigrant status are exempt from FICA taxes on wages as long as such services are allowed by USCIS. See Student Exception to FICA Tax
- Employee expense reimbursements within the specific government rate for per diems or standard mileage
- Children under 18 employed by a parent
- Employer contributions to a qualified retirement or pension plan
- Tip income if less then $20 in a month
- Workers compensation payments
For a complete list of special rules for various types of payments, see the table in IRS Publication 15.
If an employer has incorrectly collected FICA taxes, you must file Form 843 Claim for Refund and Request for Abatement. This is a complicated return and must be well supported. You may want to seek representation.
To schedule a time to discuss the opportunities for a FICA Tax Refund, click the link below.
To schedule a consultation and to receive a quote for your FICA Refund