FICA exemption

DH recently read an article stating that as of August 2003, medical residents will be exempt from paying FICA taxes (Social Security/Medicare, a total of 7.65% per pay period). I never saw the article, and working in the financial services sector, I was surprised at the news. We have not seen any change in his paycheck - meaning, to our knowledge, FICA taxes are still being withheld from his pay.

Has anyone else heard this and if so, can you find the source? I've been searching fruitlessly for weeks now...

~Molly~

Boy, that would be nice.
That did happen for us when DH started his research fellowship because the bulk of the fellowship is funded by an NIH stipend. The derm department makes up the balance of his pay and I think he pays FICA for that portion. We have had to go around and around with the payroll office because of this and they STILL owe us money.

But, I didn't know that this was going to apply to all medical residents. If so, the payroll department didn't know that because they were assuming he was a "regular" resident and needed to have the FICA taken out. At this point, I hardly consider them the experts so I would take that with a grain of salt!

Yeah - the reason I'm trying to find the article is so that he can go face payroll armed with the facts. Otherwise, chances are slim that we'd ever see that money .

Which is ironic, because lord knows I could use it a lot more than the hospital. After all, What's a few more lives saved when there's shoes to be bought!!

I did a quick search and couldn't find anything definitive. Sounds like this is an on-going issue that started with the University of Minnesota -- it looks about 20 other unversities have applied for FICA refunds based on the case with U Minn. I think that those other universities have a similar "characteristic" to U Minn -- one site said that residents have to pay tuition (?? therefore looking like "students" ??).

Not only does this amount to a good chunk of money for residents, it means $$ for the programs as well because they don't have to contribute the 7.65% employer match. Adds up for a lot of residents!

One potential downside -- if you aren't paying into SSI and become disabled, you might not be eligible for benefits (depending on prior contributions, work history, etc). Since we have disability insurance on DH, no complaints here!

Forgot to post this link:
http://www.aamc.org/advocacy/library/te ... sp0039.htm

They don't seem to have anything more updated.....but I didn't spend a whole lot of time, either.

This is perfect, thanks so much Nellie. Sometimes I think that when my DH hears anything related to numbers, his brain sorta tunes out... So a statement like "Medical residents *may be* exempt *at some point* from FICA" translates in his brain as "No taxes! Yippee!" Sigh.

I'll read this and see if there's anything more definitive outlined.

~Molly~

... So a statement like "Medical residents *may be* exempt *at some point* from FICA" translates in his brain as "No taxes! Yippee!" Sigh.

Yes, when we hear that more money might be headed our way, it's easy to tune out some of the details!