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Tax Office Provides Refresher About Student Exemption for FICA - 02/17/09

Most people who earn wages in the United States must have Social Security (FICA, Federal Insurance Contributions Act) taxes deducted from their pay. However, the Internal Revenue Code grants qualifying student-employees an exemption from having FICA withheld from their wages.

To assist the University’s student-employees as they prepare their annual income tax returns, the Tax Department offers this refresher about the student FICA (Federal Insurance Contributions Act) exemption.

A student must be enrolled at least half time to receive the exemption. During the fall and spring semesters, half time is equal to four or more credit hours for graduate students and six or more hours for undergraduate students. The threshold for summer session is three or more enrolled hours for both grad and undergrad students.

Employed grad students enrolled as “exam only” are not granted the exemption. Thus before grad students enroll as “exam-only,” they should consider the reduced-fees benefit of that status and weigh it against the FICA taxes that will be withheld.

The student FICA exemption applies only to earnings from the college or university where the student is enrolled. During brief breaks between the fall, spring, and summer sessions, the exemption from the previous semester will still apply. For example, a student who had the exemption during the fall semester and works on campus during winter break will continue to be exempt until the start of the spring semester. “Maymester” is treated as an extension of the exemption for the spring semester.

Questions about FICA taxes and exemptions may be directed to the University’s Tax Office at tax@purdue.edu.


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