Social Security and Taxes
The following information is provided to help you understand the Social Security system, your U.S. tax liabilities, exemptions and procedures. All F-1 and J-1 students and scholars MUST file an income tax return every year even if you have not earned any income in the in the U.S. Scholarships, fellowships, and assistantships may be considered U.S. income. You are not responsible for paying tax on income earned in your home country. Some countries have tax treaties with the U.S. that may significantly affect your tax liability in the U.S. and in your home country. International Students and Scholars Services cannot assist international students and scholars with completing and filing income tax returns. However, the Tax Office can give you a password to a website that assists foreign students and scholars with preparing a U.S. income tax return.

For more information, consult the following publications that are available at the IRS office at 600 Arch Street in Philadelphia or download them from the IRS website at www.irs.ustreas.gov.

Taxes you MUST pay:
Federal income tax: All F-1 and J-1 students and scholars must file a federal income tax return and pay the required tax, if any, even if you have not earned any income in the United States. Use IRS Form 1040-NR.

State income tax: All F-1 and J-1 students must file a state income tax return and pay the required tax, if any. In Pennsylvania, the state income is a flat rate of 3.07%. Use Form PA-1040.

Philadelphia Wage Tax: "For the purpose of this tax, a resident of Philadelphia is a person who is domiciled in this City ... Domicile is the place where one lives and has his permanent home and principal establishment, and to which he has the intention of returning whenever he is absent ... Every person has one and only one domicile ... A non-resident of Philadelphia, i.e., one whose permanent home is outside of Philadelphia, is subject to this tax on salaries, wages, etc. earned for work done or services rendered within the City of Philadelphia." (Income Tax Regulations and Ordinances of the City of Philadelphia, Section 206).

This means that anyone on a temporary visas, such as F-1 or J-1, who maintains a permanent residence outside of Philadelphia (for example, in their home country), are considered non-residents by the City of Philadelphia. If your employer is located in the City of Philadelphia, you can be taxed at the lower non-resident rate. If you employer is located outside of the City of Philadelphia, you are not subject to Philadelphia wage tax even though you maintain a temporary residence in the city.

Exemption from Social Security and Medicare Taxes (FICA): F-1 students: "... in some cases, a student is granted permission to work ... Social Security and Medicare taxes are not withheld from pay for the work unless the student is considered a resident alien." - IRS Publication 519 (U.S. Tax Guide for Aliens) year 2004, page 46

J-1 exchange visitors: "Social Security and Medicare taxes are not withheld on pay for services of an exchange visitor who has been given permission to work and who possesses or obtains a letter of authorization from the sponsor unless the exchange visitor is considered a resident alien." - IRS Publication 519 (U.S. Tax Guide for Aliens)

This means that Social Security (FICA) taxes should not be withheld from salary earned from employment in the U.S. If Social Security tax is withheld, then you and your employer are entitled to a refund. To get a refund, you must first ask your employer to refund you the FICA taxes that were withheld. If your employer is unwilling to give you a refund, you must file a claim for a refund with the IRS using Form 843 - Claim for Refund and Request for Abatement, and attach copy of your Form W-2 (Wage and Tax Statement), to document the amount of Social Security and Medicare taxes that were withheld.