FICA Tax Withholding | Tax Services (2024)

The Internal Revenue Code (26 U.S. Code § 3101) [PDF] imposes on employers the responsibility to withhold Social Security and Medicare taxes from the wages of employees working in the United States. Collectively, these taxes are known as Federal Insurance Contribution Act taxes or "FICA" taxes. The FICA tax rates are currently:

Social Security: 6.2% on the first $160,200 in wages earned in 2023. There is no Social Security withholding on wages earned over $160,200 in 2023. The Social Security withholding deduction is shown on your pay statement under the Employee Paid Deductions category as SS_EE.
Medicare: 1.45% on the first $200,000 in wages earned in a calendar year, 2.35% on wages earned over $200,000 in a calendar year. The Medicare withholding deduction is shown on your pay statement under the Employee Paid Deductions category as Medicare_EE.

WVU matches both the 6.2% Social Security withholding as well as the 1.45% base Medicare withholding. These employer matches are shown on your pay statement under the Employer Paid Deductions category as SS_ER and Medicare_ER respectively. Employers are not required to match the additional 0.9% Medicare withholding on wages earned over $200,000.

Most wages earned by an employee while working in the United States are subject to FICA withholding. However, there are two exemptions for which employees at WVU may qualify. WVU reviews all employees each pay cycle to determine their eligibility for exemption from FICA withholding. Employees that qualify for exemption will have it automatically applied. No action is required on an employee's part to receive an exemption for which they qualify.

Nonresident Alien FICA Exemption: Foreign nationals in F-1 or J-1 nonimmigrant status with a tax status of nonresident alien (NRA) in a calendar year are exempt from FICA withholding on employment wages. The NRA FICA exemption applies to both on-campus student employment and on- or off-campus employment for practical or academic training.

Note: If the tax status of a foreign national in F-1 or J-1 status changes from nonresident alien to resident alien in the middle of a calendar year, or if they change to astatus that does not qualify for the NRA FICA exemption (e.g., H-1B or lawful permanent resident) they will be required to pay FICA taxes if they do not meet the enrollment requirements for the student FICA exemption listed above. This may include back taxes on wages previously earned if the wages should not have been exempt from FICA withholding.

Student FICA Exemption: Wages paid to student workers and graduate assistants who meet the minimum credit hour enrollment requirement for a semester. The minimum credit hour enrollment requirement varies based on both the semester as well as a student's educational level (i.e., undergraduate or graduate).

Note: The student FICA exemption only applies to on-campus employment by WVU. Wages earned from off-campus employment for organizations other than WVU may still be subject to FICA withholding.

Minimum Enrollment for FICA Exemption	Undergraduate Students	Graduate Students
Fall and Spring Semesters	6 credit hours or more: FICA exempt 5 credit hours or less: not FICA exempt	5 credit hours or more: FICA exempt 4 credit hours or less: not FICA exempt
Summer Semester	6 credit hours or more: FICA exempt 5 credit hours or less: not FICA exempt	3 credit hours or more: FICA exempt 2 credit hours or less: not FICA exempt

FICA Taxes Overview:

The Internal Revenue Code mandates employers, under Section 3101, to withhold Social Security and Medicare taxes from employees' wages in the United States. This combined taxation is commonly referred to as FICA taxes.

Social Security:

The Social Security component is set at 6.2% on the initial $160,200 of wages for the year 2023.
No Social Security withholding is applied to wages exceeding $160,200 in 2023.
This deduction appears on the pay statement as SS_EE.

Medicare:

Medicare taxes are levied at 1.45% on the first $200,000 of annual wages and 2.35% on wages surpassing $200,000.
The Medicare withholding is itemized as Medicare_EE on the pay statement.

Employer Matches by WVU:

WVU matches both the 6.2% Social Security withholding and the 1.45% base Medicare withholding. These matches are reflected in the Employer Paid Deductions category as SS_ER and Medicare_ER.

Additional Medicare Withholding:

Employers are not obligated to match the extra 0.9% Medicare withholding on wages surpassing $200,000.

FICA Exemptions at WVU:

Nonresident Alien FICA Exemption:
- Foreign nationals in F-1 or J-1 nonimmigrant status, categorized as nonresident aliens (NRA) in a calendar year, are exempt from FICA withholding on employment wages.
- The exemption applies to on-campus student employment and on- or off-campus employment for practical or academic training.
- Change in tax status may impact exemption eligibility.
Student FICA Exemption:
- Student workers and graduate assistants meeting minimum credit hour enrollment requirements may be exempt from FICA taxes.
- Exemption is contingent on on-campus employment by WVU.
- The minimum credit hour thresholds differ for undergraduate and graduate students, varying by semester.

Minimum Enrollment for FICA Exemption:

Fall and Spring Semesters:

Undergraduate: 6 credit hours or more (FICA exempt), 5 credit hours or less (not FICA exempt).
Graduate: 5 credit hours or more (FICA exempt), 4 credit hours or less (not FICA exempt).

Summer Semester:

Undergraduate: 6 credit hours or more (FICA exempt), 5 credit hours or less (not FICA exempt).
Graduate: 3 credit hours or more (FICA exempt), 2 credit hours or less (not FICA exempt).

In summary, the provided information offers a comprehensive understanding of FICA taxes, employer matches, and exemptions at WVU, underscoring the nuanced criteria for eligibility, whether based on income thresholds, student status, or nonresident alien classifications.