FICA Exemption Criteria for Student Employees

The following criteria, part of the Internal Revenue Code (IRC), is used to determine whether a student employee can be exempted from FICA tax withholding. See SPG 201.24 for university policy regarding the FICA exemption for students.

IRC Criteria

• Student employees who are non-resident aliens and are J-1 or F-1 visa holders may be exempt from FICA tax withholding based on their visa status and length of stay in the U.S.
• Student employees who are U.S. citizens, resident aliens or permanent residents may be exempt from FICAtax withholding based on the following categories:
  • All PhD candidates working on their dissertations will be exempt from FICA tax withholding. Individuals in this category must provide the FICA Exemption Request PhD Candidate - Spring / Summer Term, signed by the department and student.
  • All graduating seniors during terms in which they are enrolled for one or more credit hours will be exempt from FICA tax withholding.
  • All other undergraduate students will be exempt during the Fall and Winter terms in which they are enrolled for 6 or more credit hours (considered to be a half-time or greater enrollment). Three credit hours or more will be used in the Spring and Summer half-terms.
  • All other graduate students will be exempt during the Fall and Winter terms in which they are enrolled for 4 or more credit hours (considered to be a half-time or greater enrollment). Two credit hours or more will be used in the Spring and Summer half-terms.

For Ann Arbor students, the payroll system will review the students' enrollment status continually throughout the year. For Flint and Dearborn students, a periodic list from the campus Registrars' offices will be used to determine student status. The above criteria will be used and no exceptions will be made for individual students. When a student's enrollment hours change during a term, retroactive FICA tax charges or refunds will not be processed.