Employers with foreign nationals currently working in the U.S. as F-1 students that were approved for H-1B status under this year’s cap may need to make certain payroll changes effective October 1, 2016 (effective date of a cap-subject H-1B).

F-1 students who have been in the U.S. for no more than five calendar years are generally exempt from Social Security, Medicare and employment taxes (FICA/FUTA) pursuant to IRS guidance.  This exemption, however, does not apply to individuals holding the H-1B status.  Accordingly, internal and/or payroll records may need to be updated to reflect additional withholding for those F-1 individuals who obtained a “change of status” approval to the H-1B status effective October 1, 2016.

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