Social Security and Medicare Tax (FICA)

The Federal Insurance Contributions Act (FICA) mandates that U.S. resident taxpayers must fund (in the form of a federal payroll tax) the following programs:

  • Social Security- old-age, survivors, and disability insurance taxes
  • Medicare- hospital insurance taxes

These taxes are usually deducted or withheld automatically by the employer. Nonresidents for U.S. tax purposes are exempt from these taxes. This includes students on Optional Practical Training (OPT) who are still nonresidents for U.S. tax purposes. Tax residents have to pay these taxes unless other exemptions apply to them. If you are unsure about your tax residency, please review these Resources for Determining Tax Residency .   If you are employed by U-M, you can also contact the U-M Payroll Office to see if their records show that you are a tax resident or a tax nonresident.

The U-M Payroll Office and the Internal Revenue Service (IRS) have posted explanations of who is and who is not required to pay the FICA taxes.

If these taxes were withheld from your paycheck in error, you should request a refund.


Reviewed and updated April, 2023

The information contained in this web site is not a substitute for advice obtained from the Internal Revenue Service or a qualified tax professional.