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Foreign National Payroll Taxes

The U.S. tax system is organized according to the calendar year. Payroll taxes are withheld or exempt as determined by tax status and treaties.

Tax Status

The IRS, Internal Revenue Service, distinguishes between a Resident Alien, RA, and Nonresident Alien , NRA, tax status. These are tax terms only. They are irrelevant for immigration purposes. Information gathered in the Foreign National Information Form determines payroll tax status.

Payroll tax withholding

Federal and state payroll tax withholding on employee wages is based on a pay-as-you-go graduated tax system.

Federal and state payroll tax withholding is required unless there is an applicable income tax treaty exemption. Income tax treaty exemption is based on country of tax residency which may not be the same as citizenship.

FICA tax withholding

FICA tax, also known as Social Security and Medicare Tax, is based on tax status. FICA tax is different from federal and state withholding tax. FICA provides for a federal retirement system and is separate from income tax treaty exemption.

FICA tax withholding is generally required for the resident alien tax status with some exceptions for those in F-1 and J-1 student status.

Nonresident alien tax status is generally exempt from FICA tax for those of F-1 student or J-1 student or non-student nonresident alien status.

Foreign national payroll tax forms are located under Payroll ServicesNonresident Alien Forms and Resident Alien Forms.

Tax status determines which individual income tax forms are required to be filed each year with federal and state government entities.

For detail information see Publication 519 “U.S. Tax Guide for Aliens”.

Contact Foreign National Tax staff with questions regarding individual tax status.