What is FICA tax and why do I have to pay it?
FICA is also called Social Security tax and is comprised of two parts. One portion is called OASDI, which funds pension payments for retired persons in the U.S, and the other portion is called Medicare Tax, which funds medical insurance for retired persons. Generally, F-1 and J-1 nonresident alien students and J-1 nonresident alien teacher/researchers are exempt from this tax. However, if you become a resident alien for tax purposes, you would be subject to FICA tax. U.S. tax law requires that you pay the tax based on your tax residency status, regardless of whether or not you ever derive any benefits from the FICA taxes you pay.
