# Taxes paid by F1 visa holder



## dirtyharry10 (Jan 10, 2015)

I recently moved to the US from India for my graduate studies, and I am currently working an on-campus job. I got my first paycheck today, and I see that about 6.2% has been deducted for Social Security, 1.5% for Medicare, 1.8% for Med Aid/Wkcmp and 11% of my earnings has been deducted for "NRA W/H Tax". I have tried looking online to better understand these taxes, but I'm not able to get past the technical jargon put up on the IRS website. Can someone explain to me what are these taxes for? Can I expect these deductions in all my future paychecks too?


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## Bevdeforges (Nov 16, 2007)

Oh yes, if you're working in the US, you will have various withholdings. But the HR or payroll department of your employer should be able to explain the withholdings in complete detail.

Basically, though Social Security is a retirement benefit (though there are other possible benefits, mostly related to disability), Medicare is health coverage in retirement, MedAid/Wkcmp is worker's compensation should you be injured on the job. NRA W/H Tax is income tax based on your current tax status as a "non-resident alien." 

You won't be able to get any of the benefit contributions back when you go back home. And the income tax withheld isn't the end of the story. At the end of the year, you'll be expected to file a tax return (as a non-resident or resident, depending on your visa status) when you will either get any excess returned to you or will be expected to settle up any balance due.
Cheers,
Bev


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## dirtyharry10 (Jan 10, 2015)

Thank you!


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## BBCWatcher (Dec 28, 2012)

Bevdeforges said:


> You won't be able to get any of the benefit contributions back when you go back home.


That's a little too strongly worded, in my view.

If you contribute into the U.S. Social Security system within any 10 calendar years at non-trivial levels, you (and your spouse) _might_ be eligible for future U.S. Social Security retirement benefits. Hitting the 10 year mark is not inconceivable for someone who pursues both undergraduate and graduate studies in the United States, for example. Note that's _within_ any 10 calendar years, not _for_ 10 years (120 months). For example, if you start an undergraduate program in the United States in September, 2016, and start working (and contributing) from that point in time, then continue through a master's degree and Ph.D., graduating with your Ph.D. in May, 2025 -- and working part-time continuously through that whole program of study, and leaving the U.S. in May, 2025 -- that'd probably be just enough to qualify for some level of future benefit.

But Bev is absolutely correct that U.S. Social Security and Medicare contributions are nonrefundable.


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## dirtyharry10 (Jan 10, 2015)

That's an interesting point. So if I understand correctly, all these deductions are binding? Also, I do not have my SSN yet, but have applied for one. Would anything change in the way of deductions once I get it? Sorry for all the amateur sounding questions, but I'd like to really understand the system over here.


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## BBCWatcher (Dec 28, 2012)

If you mean mandatory, yes. There are very few job roles in the U.S. that do not require Social Security and Medicare contributions.

Your Social Security number is important for getting your contributions properly credited to your individual work history, just in case you're able to reach the minimum qualification period. Be sure you've provided your correct SSN to your employer. You can start checking your work history at ssa.gov after you've started contributing into the U.S. system, though allow some time after the close of a calendar year for the reports to catch up. (That's a good idea anyway to make sure your employer isn't doing something very illegal like keeping your contributions for him/herself.)


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## Bevdeforges (Nov 16, 2007)

One other potential benefit of paying those US Social security contributions is that some countries with national retirement systems may count your periods of contribution toward qualification for the local retirement system. Generally, the national pension plans will count time worked overseas, though they will not count the actual compensation level for those periods. 

It's only normally done where there is a social security treaty of some sort - but these days you never know where you'll be living when you retire. Those extra quarters could come in very handy, even if you don't qualify for a US benefit.
Cheers,
Bev


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## dirtyharry10 (Jan 10, 2015)

Bevdeforges and BBCWatcher, thank you for clearing that up for me!


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