Student Employment FICA Exemption Policy
BACKGROUND:
The Internal Revenue Code imposes a tax on employers and employees referred to as the Federal Insurance Contributions Act (FICA). The Code, however, contains a number of exceptions to the FICA tax. The first is the Student FICA exception of Section 3121 (b)(10), which exempts services performed for a college or university by a "student who is enrolled and regularly attending classes" at the institution. The second is the Nonresident Alien (NRA) FICA exception under Section 3121(b)(19), which exempts a NRA employee in F-1, J-1, Q-1 status.
This policy is intended to inform university employees and others about relevant FICA tax issues; it does not constitute legal or tax advice.
GUIDELINES:
STUDENT FICA EXCEPTION
A student employee of ÎçÒ¹AV is eligible for this exemption if the following conditions are met:
- The student employee must be enrolled and attending classes on at a least half time basis, either in an undergraduate or graduate program of ÎçÒ¹AV, during the semester/quarter in which the work is being performed.
- The student employee must be classified in a student employee job code (L7XXX, 14XX, or 15XX) as designated by the Human Resources Department.
- Their primary role at ÎçÒ¹AV is that of a student; i.e. Regular Full and Part Time Staff & Faculty are not eligible for the exemption.
Determination of Eligibility for Exemption
Upon hire, Human Resources will verify, via the Student Information System, that the student employee is enrolled at least half time for the semester/quarter. Half time basis is defined as:
| Student Status | Fall, Spring, Winter Term | Summer Term * |
|---|---|---|
| Undergraduate | 6 hrs | 6 hrs |
| Graduate - Semester | 4 hrs | 2 hrs |
| Graduate - Quarter | 3 hrs | 3 hrs |
| Law School | 4 hrs | 4 hrs |
*Summer term is defined as all sessions within the summer term
If the student is enrolled in the minimum number of credit hours, they will be considered exempt from FICA for the duration of the term/session. Should circumstances change after the "add-drop" period and the minimum thresholds are not met, FICA tax will be withheld.
Exceptions to the credit hour requirements are:
- If the student is in his/her final semester/quarter (has applied for graduation).
- If the student is taking Thesis or Dissertation.
Human Resources will reassess eligibility for FICA exemptions at the start of each new semester/quarter and again after the “add-drop” period each term via a report of active student employees and their number of enrolled hours per term.
The FICA exemption is not eligible for a student employee during summer break if he/she is not enrolled at ÎçÒ¹AV during the summer sessions. Human Resources will monitor student employee enrollment each summer session to determine eligibility for the FICA Exemption.
The Summer term has multiple summer sessions. The calendar is available online . Sample Session dates are listed below:
| Summer Session A | May 20 - June 28 |
| Summer Session B | July 1 - August 9 |
| Summer Session C | June 3 - July 26 |
If there is a break in enrollment of more than five weeks in length, the student employee will not be eligible for the FICA exemption. For example, if the student is enrolled at least half time in Summer Session A, but not enrolled in Summer Session B or C, the FICA exemption will end effective June 28th.
The FICA exemption does not apply to any other University break if that break extends more than five weeks in length.
NRA FICA EXCEPTION
A student, teacher, researcher, or scholar temporarily present in the U.S. on an F-1, J-1, or Q-1 visa is usually exempt from FICA taxes, as long as they are considered “nonresident aliens” for income tax purposes.
Determination of Eligibility for Exemption
Upon hire, any visa holder should enter all of their data into the Sprintax Calculus Nonresident Alien Tax Compliance system. Employees should send an e-mail to nra-processing@luc.edu to request a login and password if you did not receive a login email from Sprintax upon being hired. The University must perform a substantial presence test on each employee to determine their status as either a nonresident alien or resident alien for tax purposes.
For more information on Sprintax Calculus, please visit ÎçÒ¹AV’s Sprintax Calculus Nonresident Alien Tax Compliance system page.
General Guidelines:
- An F-1 student visa holder is considered a nonresident alien for five calendar years
- A J-1 visa holder whose primary purpose is a student is considered a nonresident alien for five calendar years
- A J-1 visa holder whose primary purpose is that of a teacher, researcher, or scholar is considered a nonresident alien for two calendar years
- Employees in H1-B, TN, O-1 or E-3 status are fully subject to FICA tax withholding. No FICA exemption is available to these visa categories
In order to determine an employee’s status we must look at their date of entry in the U.S. If an individual is physically present in the U.S. for any part of a calendar year, that year counts as a full year. For example, a J-1 researcher who arrived in the U.S. on December 27, 2023 counts calendar year 2023 as their first exempt calendar year. They would be exempt from FICA from December 27, 2023 through December 31, 2024. On January 1st, 2025 this employee would be considered a resident alien for tax purposes and no longer be exempt from FICA.
Reviewed/Updated: June 2024
BACKGROUND:
The Internal Revenue Code imposes a tax on employers and employees referred to as the Federal Insurance Contributions Act (FICA). The Code, however, contains a number of exceptions to the FICA tax. The first is the Student FICA exception of Section 3121 (b)(10), which exempts services performed for a college or university by a "student who is enrolled and regularly attending classes" at the institution. The second is the Nonresident Alien (NRA) FICA exception under Section 3121(b)(19), which exempts a NRA employee in F-1, J-1, Q-1 status.
This policy is intended to inform university employees and others about relevant FICA tax issues; it does not constitute legal or tax advice.
GUIDELINES:
STUDENT FICA EXCEPTION
A student employee of ÎçÒ¹AV is eligible for this exemption if the following conditions are met:
- The student employee must be enrolled and attending classes on at a least half time basis, either in an undergraduate or graduate program of ÎçÒ¹AV, during the semester/quarter in which the work is being performed.
- The student employee must be classified in a student employee job code (L7XXX, 14XX, or 15XX) as designated by the Human Resources Department.
- Their primary role at ÎçÒ¹AV is that of a student; i.e. Regular Full and Part Time Staff & Faculty are not eligible for the exemption.
Determination of Eligibility for Exemption
Upon hire, Human Resources will verify, via the Student Information System, that the student employee is enrolled at least half time for the semester/quarter. Half time basis is defined as:
| Student Status | Fall, Spring, Winter Term | Summer Term * |
|---|---|---|
| Undergraduate | 6 hrs | 6 hrs |
| Graduate - Semester | 4 hrs | 2 hrs |
| Graduate - Quarter | 3 hrs | 3 hrs |
| Law School | 4 hrs | 4 hrs |
*Summer term is defined as all sessions within the summer term
If the student is enrolled in the minimum number of credit hours, they will be considered exempt from FICA for the duration of the term/session. Should circumstances change after the "add-drop" period and the minimum thresholds are not met, FICA tax will be withheld.
Exceptions to the credit hour requirements are:
- If the student is in his/her final semester/quarter (has applied for graduation).
- If the student is taking Thesis or Dissertation.
Human Resources will reassess eligibility for FICA exemptions at the start of each new semester/quarter and again after the “add-drop” period each term via a report of active student employees and their number of enrolled hours per term.
The FICA exemption is not eligible for a student employee during summer break if he/she is not enrolled at ÎçÒ¹AV during the summer sessions. Human Resources will monitor student employee enrollment each summer session to determine eligibility for the FICA Exemption.
The Summer term has multiple summer sessions. The calendar is available online . Sample Session dates are listed below:
| Summer Session A | May 20 - June 28 |
| Summer Session B | July 1 - August 9 |
| Summer Session C | June 3 - July 26 |
If there is a break in enrollment of more than five weeks in length, the student employee will not be eligible for the FICA exemption. For example, if the student is enrolled at least half time in Summer Session A, but not enrolled in Summer Session B or C, the FICA exemption will end effective June 28th.
The FICA exemption does not apply to any other University break if that break extends more than five weeks in length.
NRA FICA EXCEPTION
A student, teacher, researcher, or scholar temporarily present in the U.S. on an F-1, J-1, or Q-1 visa is usually exempt from FICA taxes, as long as they are considered “nonresident aliens” for income tax purposes.
Determination of Eligibility for Exemption
Upon hire, any visa holder should enter all of their data into the Sprintax Calculus Nonresident Alien Tax Compliance system. Employees should send an e-mail to nra-processing@luc.edu to request a login and password if you did not receive a login email from Sprintax upon being hired. The University must perform a substantial presence test on each employee to determine their status as either a nonresident alien or resident alien for tax purposes.
For more information on Sprintax Calculus, please visit ÎçÒ¹AV’s Sprintax Calculus Nonresident Alien Tax Compliance system page.
General Guidelines:
- An F-1 student visa holder is considered a nonresident alien for five calendar years
- A J-1 visa holder whose primary purpose is a student is considered a nonresident alien for five calendar years
- A J-1 visa holder whose primary purpose is that of a teacher, researcher, or scholar is considered a nonresident alien for two calendar years
- Employees in H1-B, TN, O-1 or E-3 status are fully subject to FICA tax withholding. No FICA exemption is available to these visa categories
In order to determine an employee’s status we must look at their date of entry in the U.S. If an individual is physically present in the U.S. for any part of a calendar year, that year counts as a full year. For example, a J-1 researcher who arrived in the U.S. on December 27, 2023 counts calendar year 2023 as their first exempt calendar year. They would be exempt from FICA from December 27, 2023 through December 31, 2024. On January 1st, 2025 this employee would be considered a resident alien for tax purposes and no longer be exempt from FICA.
Reviewed/Updated: June 2024