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.
- FICA Exemption Criteria for Student Employees
- Foreign Student Liability for Social Security and Medicare Taxes
If these taxes were withheld from your paycheck in error, first request a refund from your employer. If your employer is able to refund these taxes, no further action is necessary. For U-M-earned income, contact the U-M Payroll office .
If your employer is not able to refund these taxes, you should request a refund from the Internal Revenue Service.
Reviewed and updated March, 2025