Student FICA Exemption
UTEP students who work on campus may be eligible for an exemption from Federal Insurance Contribution Act (FICA) taxes on wages earned after June 30, 2000. Those modifications now allow Texas to exempt qualified student employees at public universities from FICA taxation for social security coverage.
For a UTEP Student to Qualify for the Exemption, the Student Must Be:
- Enrolled at least half time (unless it is the student's last semester and the student is enrolled in the number of credit hours needed to complete the requirements for obtaining a degree. The student must notify Payroll for the exemption to be available).
- Be a non-career employee (not eligible for retirement benefits), and
- Work less than 20 hours per week or not more than 4 1/2 months per year (except 50% time Graduate Student Titles)
|Half time requirements||Spring/Fall Semester||Summer Semester **|
** Note: to be exempt from OASI tax for the entire summer, you must be a qualified student for the entire summer. See example below.
* The determination of the student's enrollment status will be confirmed twice each semester: once on the census date (or 12th class day) and once on the last day of finals.
The payroll program will search the student database for social security number and date of birth matches. If the employee's student identification number is not his/her social security number, the match will NOT occur, and FICA taxes will be withheld.
Wages paid for services performed by a student-employee are eligible for the FICA exemption for all payroll periods of a month or less that fall wholly or partially within the academic term.
If the student qualifies for the exemption, no FICA taxes will be deducted. An exception will occur if there is a payroll period ending prior to the 12th class day, which follows a break of five weeks or more. The payroll system will not know if the student qualifies for the exemption until the 12th class day. However, the tax withheld will be refunded on the next payroll.
For school breaks of more than five weeks, the FICA exemption is not available for wages earned during that period.
Automatic Refund Process
Student OASI Exemption status is set at census date for each academic period. Census date is at least twelve class days into an academic term. As a result there may be pay periods prior to the student exemption determination in which a student may be paid and taxed. For each academic period, there will be one automatic refund process to issue any refunds due as a result of this timing difference. The refunds will process through the payroll system and in most cases, refunds will be processed on the next available payroll following the census date. Students must have their social security number entered into Banner (student record) for the process to work. Student social security numbers are cross-referenced with employment records and therefore must be present to exempt the student from FICA taxes. If employees are not included in the automatic process then employees will have to contact payroll and will be dealt with on a case by case basis.