Ezel / IRS Rulings / 201013050

CCA 201013050: IRS discusses FICA withholding for nonresident student workers

Number
201013050
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Nonresident Aliens
Topics
Employment taxes
Code sections
§ 3121, § 6110
Ruling dated
March 1, 2010
Publicly released
April 2, 2010
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advice discussed withholding and FICA issues for nonresident alien students. It stated that special withholding procedures may be needed for the Making Work Pay Credit and that nonresident aliens generally do not receive the standard deduction. For FICA, the advice explained that the student exemption under IRC § 3121(b)(18) may not apply when employment is not the type of work connected to the purpose for which the student was admitted. It also noted documentation requirements for FICA refund claims and possible employment-authorization issues for students with F, M, or J status.

Ruling snapshot

  • Question: How should employers address withholding and FICA issues involving nonresident alien students?
  • Outcome: Advice given
  • Key authorities: IRC § 3121(b)(18); Notice 2009-91; IRS Publications 15 and 519

Full text (IRS public release)

ID: CCA_2010030110284532 Number: 201013050
Release Date: 4/2/2010
Office: -----------------------------
UILC: 3121.02-11

From: --------------------
Sent: Monday, March 01, 2010 10:28:48 AM
To: --------------------------------------
Cc:
Subject: RE: General question regarding international student taxes

You're welcome. For the Making Work Pay Credit, you may also want to point the discussion of withholding on nonresident aliens on pages 17-18 of Publication 15. Also, Notice 2009-91 indicates that special withholding procedures are necessary for nonresident aliens to account for the Making Work Pay Credit, as well as the fact that NRAs don't get the standard deduction.

With regard to the FICA, issues with respect to NRA students can be very complex. For example, take a look at the information on page 50 of Publication 519. This discussion goes into detail and highlights the fact that students admitted to work under F, M, or J status only have permission to do certain types of work. If they are employed in some capacity which is not considered employment to carry out the purpose for which the student is admitted to the US, then the FICA exemption at 3121(b)(18) would NOT apply. Moreover, NRA students with M visas are required to submit special US Citizenship and Immigration Services forms in order to accept certain types of employment. Uncertainty over whether students are authorized under their visas to perform certain types of employment may be another reason why employers are simply choosing to withhold and pay FICA. Also, refund claims for FICA need to be carefully documented with copies of visas and work authorizations attached. If a claim is not properly documented, it may be delayed.

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