The University Record, September 16, 1998

FICA tax withholding criteria for students changes

From the Payroll Office

Effective fall term, the criteria used to determine whether a student employee can be exempted from FICA tax withholding changes as a result of Internal Revenue Service guidelines that were published in January 1998.

Students with temporary hourly appointments and graduate student assistants could be affected.

New criteria:

 

Student employees who are non-resident aliens and are J-1 or F-1 visa holders are exempt from FICA tax withholding based on their visa status and length of stay in the United States.

 

Students who are U.S. citizens or permanent residents will be exempt from FICA tax withholding based on the following categories:

 

All graduate students working on their dissertations and graduating seniors will be exempt during the terms in which they are enrolled for one or more credit hours.

 

All other undergraduate students will be exempt during fall and winter terms in which they are enrolled for six or more credit hours, considered to be half-time or greater enrollment. Three credit hours or more will apply in the spring and summer half-terms.

 

All other graduate students will be exempt during fall and winter terms in which they are enrolled for four or more credit hours, considered to be half-time or greater enrollment. Two credit hours or more will apply in the spring and summer half-terms.

 

For Ann Arbor campus students, the payroll system will review students' enrollment status on a biweekly basis throughout the year. A periodic list from the registrars' offices on the Dearborn and Flint campuses will be used to determine the status of students on those campuses.

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.

This information should be shared with student employees in your unit so they will understand the impact of the guidelines on their wages.

For additional information, contact Norel Tullier, 764-9518 or via e-mail to norel@umich.edu; John Vereecke, 647-4963; Jayna Bajorek, 763-1115; or Karen Moran-Woloszyn, 647-3974.


You can always drop us a line: urecord@umich.edu.