Do the exchange workers have Social Security, Medicare taxes and unemployment payments withheld?
A. The law sees participants of the program and holders of the J1 visa as non-resident aliens. With that, they are not supposed to have Social Security (FICA), Medicare or federal unemployment (FUTA) taxes withheld. We recommend contacting a tax professional to find out whether the participants are exempt from state unemployment taxes in your state. Visit http://www.irs.gov/ for the IRSs Employer Tax Guide and Publication 515 for more information.
