What is FICA?
FICA tax is a combination of a 6.2% Social Security tax and a 1.45% Medicare tax the IRS imposes on employee earnings. FICA is the abbreviation for the Federal Insurance Contributions Act Taxes which are withheld from the employee paychecks and matched by employers, including UW. FICA is the meancs by which Social Security and Medicare are funded. If taxed, 6.2% of your gross wages plus an equal amount paid by UW will be paid in and utilized in determining your benefit upon retirement. For 2020, the first $137,700 of a persons's wages is subject to the Social Security tax.
What is Medicare Tax?
Similarly, Medicare taxes are 1.45% ofyour wages withheld from your paycheck and an equal amount matched by your employer. There is no limitation upon the amount of wages subject to Medicare taxed. Medicare taxes are the means by which government funds Medicare.
Are Students exempt from the FICA and Medicare Taxes?
The Internal Revenue Code provides an exemption from FICA and Medicare taxes for students paid by the colleges and universities in which they are enrolled. This exemption is mandatory and will apply to most undergraduate and graduate students employed by the UW. There are regulations that further define who is a student and eligible for the exemption from these taxes.
How many credits do I have to take to be considered a student under the student FICA exemption?
The IRS rules require that students be "enrolled and regularly attending classes." The number of credits you need to be taking at the UW is determined by whether you are an undergraduate or graduate student and the academic quarter in which you are enrolled.
|FICA CHART OF MINIMUM CREDIT HOURS AND MAXIMUM HOURS WORKED
|Minimum Credits Per Quarter
|Graduate School Student
|Professional School Student
|Graduate School Student- TA or RA*
|Ph.D. Candidate-Working on Dissertation
|Ph.D. Candidate-TA or RA
|Post Doctoral Students (Senior Fellows) and Medical Residents
Note 1: There is an assumed average of 20 hours of work per week, however, FIC and Medicare withholding are not triggered until employment is more than 30 hours per week.
Note 2: A student in their final quarter( has applied for graduation), and enrolled in the number of hours needed to complete their graduation requirements, is still eligible for the FICA exemption, even if takiing fewer credit hours than shown here
Note 3: Graduate school students who are teaching or research assistants must be registered for 10 credits during Autumn, Winter and Spring Quarters and 2 credits during Summer Quarters. However, FICA and Medicare withholding are triggered if registration is below 5 credits during Autumn, Winter and Spring Quarters or 1 credit during Summer Quarter.
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How many hours can I work and still be subject to the student FICA Exemption?
Undergraduate students, meeting the 6 credit hour requirement, above, may work no more than 20 hours per week in order to maintain their eligibility for the student FICA exemption. Graduate students may not work more than 20 hours per week and must be enrolled in the credit hours specified in the above chart in order to maintain their student FICA exemption. It is understood that graduate student teaching and research assistants subject to collective bargaining may work no more than an average of 20 hours per week during the quarter, regardless of whether vacation or holidays are taken.
Are recipients of Post-Doctoral training grants and fellows subject to the student FICA exemption?
Recipients of stipends do not have FICA and Medicare taxes withheld from their stipends. Stipends are not considered to be wages.
Is enrollment monitored for purposes of the student FICA exemption?
Yes. While class attendance is not monitored, enrollment is monitored each pay period through an interface between the student and payroll databases.
What about Foreign National Students?
Student employees who are non-resident aliens and are J-1 of F-1 visa holders may be exempt from FICA tax withholding based on their visa status and length of stay in the U.S.
How does the student FICA exemption work during breaks and vacations?
FICA and Medicare taxes are both deducted from student pay checks during breaks, vacations and periods of "on-leave" status because students are not "enrolled and regularly attending classes".