Particle.news
Download on the App Store
3 ARTICLES
·
last mo.

Senate Proposal Would End FICA Exemption for F‑1 OPT Workers

Now before the Finance Committee, the Tom Cotton measure would subject OPT wages to Social Security and Medicare taxes if enacted.

OPT Fair Tax: 97,000 Indian Students at Risk as US Plans to End Tax Exemption
Image

Overview

  • The OPT Fair Tax Act (S.2940) introduced in September 2025 explicitly removes the payroll‑tax exemption for F‑1 students working under OPT.
  • Under current IRS rules, most nonresident F‑1 students are exempt from Social Security and Medicare taxes for their first five calendar years in the United States.
  • If the change passes, employees would pay 7.65% and employers would match 7.65%, raising the total payroll cost on OPT wages by about 15.3%.
  • On a $50,000 salary, the combined employer‑employee FICA contributions would add roughly $7,650, cutting take‑home pay and increasing hiring costs.
  • Open Doors data show about 97,556 Indian students participated in OPT in 2023–24, and supporters cite hiring parity while critics highlight paying into benefits many students cannot access.