The Social Security and Medicare taxes that are withheld from your paychecks are collectively referred to as the Federal Insurance Contributions Act tax, or "FICA tax." You pay half these taxes, and your employer pays half: 7.65% of your salary or wages each for a total of 15.3%, as of 2022.
Depending on your tax status and income, it's possible to accidentally overpay FICA taxes. You may be able to claim a Social Security tax refund if that happens.
- You might overpay Social Security and Medicare taxes for a number of reasons. Some workers are exempt from paying these taxes.
- The government will give the money back to you if this happens, either as a refund or you can claim it as a tax credit in some cases.
- You must first attempt to claim a refund from your employer.
- File Form 843 with the IRS to claim a refund, along with a copy of your Form W-2. You may have to submit additional forms as well.
- There's a three-year statute of limitations, so you won't get your money back if you wait too long.
How Social Security and Medicare Tax Is Paid
FICA taxes are withheld from your paychecks along with income tax if you work as an employee.
The Social Security portion of the FICA tax is subject to a cap: $142,800 in 2021, increasing to $147,000 in 2022. This is referred to as the "wage base." You don't owe Social Security tax on income you make over this amount in one calendar year. Withholding would stop if your income reaches $147,001 in December. But it would start up again on January 1 until your earnings again reach this threshold.
FICA taxes are your self-employment tax if you work for yourself rather than an employer. You must make quarterly estimated payments to the IRS for your FICA taxes if you are:
- An independent contractor
- A sole proprietor
- A partner in a partnership
- A member of a single- or multi-member LLC that isn't treated as a corporation
- A member of a qualified joint venture
You must pay the full 15.3% to cover both the employee and the employer portions. But you can claim an above-the-line tax deduction as an adjustment to income for half of this amount.
Who Is Exempt From FICA Taxes?
An exemption from Social Security and Medicare taxes applies to non-immigrant students, scholars, teachers, researchers, and trainees (including medical interns) who are temporarily present in the United States on F-1, J-1, M-1, or Q-1 visas as long as they remain nonresidents for federal income tax purposes.
The exemption also applies to any period during which a foreign student is in "practical training" or other off-campus employment allowed by U.S. Citizenship and Immigration Services (USCIS).
Non-immigrants on F-1, J-1, M-1, or Q-1 visas can claim refunds for their share of these taxes withheld from their paychecks as long as they qualify as nonresident alien taxpayers. They must be in "substantial compliance" with their visas. They can't have been physically present in the U.S. for more than five years. Those who become resident aliens must begin paying Social Security and Medicare taxes.
Employees of foreign governments who hold A-visas are also exempt from FICA withholding, as are crew members of ships or aircraft who are present in the country on D-visas. The ships and aircraft in these situations must be foreign vessels owned by foreign employers.
Employees of international organizations are exempt as well. They typically hold G-visas. Nonresidents who are present in the U.S. on H-visas don't have to pay FICA taxes, either. These are often temporary agricultural workers.
Who Can Get a Refund for FICA Overpayment?
You are entitled to a refund of the excess amount if you overpay your FICA taxes.
You might overpay if:
- You aren't subject to these taxes, but they were withheld from your pay.
- You didn't owe FICA taxes, but you made estimated tax payments.
- You calculated your estimated payments incorrectly.
- Your total income from two different employers is over the wage base, but both employers withheld FICA taxes.
The percentages withheld for FICA tax might sound small. But they can amount to a large payment. You'd get $3,825 back if you're refunded 7.65% of a $50,000 salary.
You can submit a request to have those taxes refunded if you've overpaid for any reason. You must first attempt to claim a Social Security or Medicare tax refund from your employer. You can submit your refund claim to the Internal Revenue Service (IRS) on Form 843 if you can't get a full refund from your employer.
An Exempt Taxpayer Example
An international student in a master's degree program in the U.S. is on optional practical training from August of 2020 through August of 2021. The student shouldn't be subject to FICA taxes. But they're withheld because the employer didn't realize that.
The student is in the U.S. on an F-1 visa and has never worked without Immigration and Naturalization Service (INS) authorization under a student visa. The student should be able to file for a Social Security and Medicare tax refund to recapture the taxes that were mistakenly withheld.
How to Claim a FICA Tax Refund
You must complete and submit IRS Form 843 to claim a refund of Social Security and Medicare taxes.
When you apply for a refund from the IRS, include either:
- A letter from your employer stating how much you were reimbursed
- A cover letter attesting that your employer has refused or failed to reimburse you
Attach a copy of your Form W-2 for the tax year in question to substantiate how much was withheld from your pay. Boxes 4 and 6 on the W-2 show how much in Social Security and Medicare taxes was withheld.
Include a copy of the page from your passport that displays your visa stamp if you're a nonresident foreign worker on a visa. Include INS Form I-94 as well, along with documentation showing that you have permission to work in the United States. You might also have to submit INS Form I-538 and IRS Form 8316.
Submit your paperwork to the IRS office where your employer files Form 941. You should receive reimbursement if you're entitled to it. There's a three-year statute of limitations for claiming tax refunds, so you won't be able to receive a refund for a tax year more than three years ago.
Frequently Asked Questions (FAQs)
When will I get my FICA refund?
Requesting a FICA refund isn't a quick process. It can take the IRS from three to four months to review your request and issue your refund.
Is what you pay into Social Security and Medicare calculated in your tax refund?
You can claim excess FICA taxes as a credit toward your income taxes in some cases. You can do this when you file your Form 1040 if you had multiple employers and too much withheld. But first, the IRS requires you to try to get the credit back from your employer if you had just one employer. File Form 843 if that's unsuccessful. You can't claim a credit on Form 1040 in this case.