University of Michigan - Payroll Office

FICA Exemption Criteria for Student Employees

Effective Fall 1998, the criteria used to determine whether a student employee can be exempted from FICA tax withholding changed as a result of IRS guidelines that were published in January, 1998.

CRITERIA EFFECTIVE 9/1/98

Student employees who are non-resident aliens and are J-1 or F-1 visa holders will continue to be exempt from FICA tax withholding, if applicable, based on their visa status and length of stay in the U.S.

Student employees who are U.S. citizens, resident aliens or permanent residents will be exempt from FICA tax withholding based on the following categories:

All graduate students working on their dissertations AND graduating seniors will be exempt from FICA tax withholding during the terms in which they are enrolled for 1 or more credit hours. Individuals in this category must provide a letter from their departments verifying this status.

All other undergraduate students will be exempt during the Fall and Winter terms in which they are enrolled for 6 or more credit hours (considered to be a half-time or greater enrollment). Three credit hours or more will be used in the Spring and Summer half-terms.
All other graduate students will be exempt during the Fall and Winter terms in which they are enrolled for 4 or more credit hours (considered to be a half-time or greater enrollment). Two credit hours or more will be used in the Spring and Summer half-terms.

For Ann Arbor students, the payroll system will review the students' enrollment status on a biweekly basis throughout the year. For Flint and Dearborn students, a periodic list from the campus Registrars' offices will be used to determine student status. The above criteria will be used and no exceptions will be made for individual students. When a student's enrollment hours change during a term, retroactive FICA tax charges or refunds will NOT be processed.