University of Minnesota
Office of Human Resources
http://www.umn.edu/ohr
612-625-2016

Social Security & Medicare (FICA) Tax Deductions

The Federal Insurance Contributions Act (FICA) describes the combined taxes withheld for Social Security (referred to as OASDI - Old Age Survivor and Disability Insurance - on your pay statement) and Medicare (referred to as Fed FICA Med Hospital Ins/EE on your pay statement).

Special FICA withholding rules apply to different employee groups.

Employees

Non-student employees are generally subject to FICA tax withholding. Social Security (OASDI) is withheld on taxable gross income up to a certain wage limit each year, but there is no wage limit for Medicare withholding. The current rates of withholding are 6.2 percent for OASDI and 1.45 percent for Medicare.  However, some federal employees and police department employees are subject to only Medicare withholding.  When an employee's wages exceeds $200,000, an additional .9% Medicare tax is withheld in the pay period in which the wages go over $200,000 and continues through the end of the calendar year.

The FICA – Wage Limits and Tax Rates table includes rates for current and previous years Social Security (OASDI) and Medicare.

Students

The University of Minnesota follows the IRS rules in determining whether a student is exempt from FICA withholding. The most recent Internal Revenue Service (IRS) guidelines are in Revenue Procedure 2005-11 (Rev. Proc. 2005-11) for services performed on or after April 1, 2005. (modifying the "safe harbor" FICA exemption standards provided in Rev. Proc. 98-16) sets forth the standards to use to determine whether student employees are eligible for the "student FICA Exemption."

The University of Minnesota follows the IRS rules in determining a student's exemption from FICA withholding.

For more information concerning the Student FICA exemption and Revenue Procedure 2005-11, see the FICA – IRS Student Guidelines.

Nonresident Alien Employees

Special IRS FICA withholding rules govern nonresident alien students and scholars in the following visa classifications: F-1, J-1, M-1 and Q-1. See the Nonresident Aliens FICA Exemption Rules for detailed information concerning the IRS regulations and eligibility for exemption from FICA tax.