Do I withhold FICA for an F-1 student?

The short answer for most employers: no. An F-1 student who is a nonresident alien for tax purposes is exempt from Social Security and Medicare, so you do not withhold those taxes from their paycheck and you do not owe the employer match. Income tax is a different story. You still withhold federal and Massachusetts income tax the same as you would for any W-2 employee.

This guide explains who qualifies, what the exemption actually covers, and what you do still owe. SimpleStub generates pay stubs that reflect the exemption correctly. It does not file your taxes or give legal advice. Confirm the employee's residency status before you rely on any exemption.

Do I withhold FICA for an F-1 OPT employee?

No, as long as the employee is a nonresident alien for tax purposes. IRC 3121(b)(19) exempts F-1 students who are nonresident aliens from Social Security and Medicare (FICA) on any work authorized under their F-1 status, and both OPT and STEM OPT qualify. The exemption runs both ways: the employee owes nothing and you, the employer, owe no matching contribution either.

The taxes that do not apply:

• Social Security (OASDI): normally 6.2% from the employee and 6.2% from the employer.
• Medicare: normally 1.45% from the employee and 1.45% from the employer.

Federal unemployment tax (FUTA) is also generally not owed on F-1 nonresident-alien wages under IRC 3306(c)(19). FUTA never appears on a pay stub because it is employer-paid only, but one fewer tax is still worth knowing.

What does the exemption actually turn on?

The exemption follows the employee's tax residency, not the OPT card. An F-1 student's EAD establishes work authorization; nonresident-alien status establishes FICA exemption. You need both to apply it correctly.

F-1 students are generally treated as nonresident aliens during their first five calendar years of US presence. After that, the substantial presence test can reclassify them as resident aliens, and FICA applies from that point forward. Year six or beyond is where employers most commonly miss the shift.

Keep the following on file, both for I-9 purposes and to document the basis for the exemption: the I-20 with the OPT or STEM OPT endorsement, the EAD card (within its validity dates), the I-94, and the passport and visa.

What taxes do I still withhold?

FICA exempt does not mean tax-free. Income tax withholding still applies in full.

One nuance for federal withholding: F-1 nonresident aliens must follow special W-4 instructions under IRS Notice 1392. In general, they must claim single filing status, and they may be required to write "NRA" on the form. They are also limited in some entries. Have the employee complete the W-4 before the first paycheck and retain it on file.

What should the pay stub show?

For an FICA-exempt F-1 employee, the stub should carry income taxes and any applicable deductions, with no Social Security or Medicare lines. A compliant stub for a Massachusetts employer includes:

• Gross pay for the period, with year-to-date.
• Federal income tax withheld (current and YTD).
• Massachusetts income tax withheld at 5.0% (current and YTD).
• Employee MA PFML contribution as a post-tax deduction (current and YTD).
• Net pay.
• No Social Security line and no Medicare line.

Massachusetts law (M.G.L. c. 149, s. 148) requires an itemized pay statement every pay period that shows, at minimum: employer name, employee name, pay-period dates, hours worked, rate of pay, and all deductions. These requirements apply regardless of visa status.

How does the W-2 look different?

Because no FICA was withheld, boxes 3 through 6 on the W-2, which cover Social Security and Medicare wages and taxes, are blank. Wages still appear in box 1. Furnish the W-2 to the employee and to the SSA by January 31. The year-to-date figures on the employee's final stub of the year should reconcile to the W-2, which is one more reason YTD tracking matters all year long.

What if FICA was withheld by mistake?

Start with the employer. The employee should ask you to refund the over-withheld amount and correct the records. If you are unable to do that, the employee can go directly to the IRS: file Form 843 (Claim for Refund and Request for Abatement) along with Form 8316 (Information Regarding Request for Refund of Social Security Tax Erroneously Withheld). Catching the error early is simpler for everyone.