1012: Student Employees – Applicability of FICA Tax
Georgetown University has established automated procedures to comply with Section 3121 (b) (10) of the Internal Revenue Code. This section provides an exemption from FICA tax for service performed in the employ of a college or university by a student who is enrolled and regularly attending classes at such college or university. Exemption from FICA tax is provided to student employees who meet specific criteria regarding academic enrollment and number of hours worked per week. Student employees who fail to meet the specific criteria are subject to the FICA tax for hours worked. In such cases, departments will be charged the employer’s share of the FICA tax.
The automated procedures have been established to
- provide a maximum level of compliance with the law by examining each student’s academic enrollment status and number of hours worked per week at the conclusion of each biweekly pay period.
- afford the exemption to all students that meet the compliance criteria to minimize the effect of tax withholding on net pay received by students.
Exemption from FICA tax withholding is allowed during the academic year for students employed on an hourly basis who
- are enrolled at least half time status according to the definition established by the University Registrar for the student’s academic program for undergraduate and graduate students alike, and
- work twenty (20) hours or less in each week of the pay period.
To qualify as full-time, the student must have sufficient credit hours recorded in the Banner Student Information to reach at least half time status for the relevant academic term at the close of business on the last day of the payroll period. The relevant academic term is defined as the academic term (Fall or Spring) that is in session on the last day of the payroll period, according to the official start and end dates established by the University Registrar for each academic term.
Student employees will not be exempt from FICA tax during the summer.
Note: if Georgetown University continues to employ a student worker in between semesters, the University should be able to grant the student FICA exception provided the break is less than 5 weeks. If the student starts working a week before classes begins or continue to work a week after classes end then the student should still be eligible for the student FICA exception.
Student recipients of monthly fellowship payments in the summer or academic year are considered to be exempt from FICA tax given the conditions of the appointment and the intrinsic and continuing academic nature of their responsibilities.
There are different rules for non-citizens. Please contact the Tax Department at firstname.lastname@example.org
Employer Matching Share
For any payroll period when a student employee is not eligible for FICA tax exemption, the student will have FICA tax withheld from their pay for that period. The corresponding employer share will be charged to the employing department(s) cost center(s). Departments which employ students who work in more than one department should work closely together as both departments will be charged with the employer’s share of the FICA tax if the student works more than 20 hours and/or is not at least a half-time student.
For students employed with a subsidy from the Federal Work- Study program, the employing department will pay the full amount of the employer share of FICA tax in any applicable payroll period, as Federal regulations prohibit use of these funds for payment of any fringe benefit. FICA exemption status does not, however, alter the percentage of wages paid by the Federal Work-Study program.
The University Registrar is responsible for defining half-time student status. Departments which employ students who work in more than one department will each be responsible for paying their share of FICA if a student’s total work hours exceed 20 in a work week and the employer’s total share if a student is work study.
Contact the University Payroll Office for questions concerning this policy. Contact the University Registrar’s office for questions as to whether a student is half-time.