Issued:
February 1, 1995
Revised:
April 9, 1998
Effective:
January 5, 1998
A. Purpose
Explain policy and procedures concerning the FICA exemption for students
working in wage positions on campus.
B. Scope
Applies to all students who are enrolled and regularly attending classes
and who receive compensation from an on-campus wage position. Does not
apply to career employees whose employment is not incident to and for the
purpose of pursuing a course of study.
C. Policy
Compensation paid to students working in wage positions on campus may be
exempt from FICA (Social Security and Medicare) withholding taxes. To
qualify for the exemption, a student must be enrolled at least on a
half-time basis, perform services as an incident to and for the purpose of
pursuing a course of study and not be a career employee. A career employee
is defined as one who is eligible to participate in the university's
retirement plan and/or who is eligible for qualified tuition reduction
(employee tuition waiver plan) other than graduate teaching and research
assistants and/or is defined by the university as a career employee. The
university=s definition of career employee includes all 1500-hour wage,
part-time administrative and part-time faculty employees (see Item D.6.
for exceptions). Students who perform services in multiple job positions
will be deemed a career employee with respect to all of the positions if
the individual is a career employee in anyone or more of the job positions.
D. Procedures
-
A half-time student for Fall and Spring semesters is defined as either an
undergraduate or graduate student enrolled in at least six or five credit
hours a semester, respectively.
For summer school, an undergraduate student will be considered half-time
for:
-
the current semester if enrolled in at least three credit hours during
Maymester, Summer School I or Summer School II or six credit hours during
Summer School III.
-
Summer School I if enrolled in a combination of three credit hours during
Maymester and Summer School I. The student must be enrolled in Summer
School I.
For summer school, a graduate student will be considered half-time
for:
-
the current semester if enrolled in at least three credit hours Maymester,
Summer School I or Summer School II or five credit hours Summer School III.
-
Summer School I if enrolled in at least three credit hours in a
combination of Maymester, Summer School I and/or Summer School III. The
student must be enrolled Summer School I.
-
Summer School II if enrolled in at least three credit hours in a
combination of Summer School II and Summer School III. The student must
be enrolled Summer School II.
-
Summer School III if enrolled in at least five credit hours in a
combination of all summer school sessions. The student must be enrolled
Summer School III.
- Summer School I and Summer School II if enrolled in at least five credit hours in a combination of all summer school sessions.
-
The enrollment hours will be verified by the Payroll Office for all
students in a wage position for each semester or summer school session as
of the census date. If a student is not enrolled at least half-time, FICA
taxes will be withheld and will continue for the remainder of the semester
or summer school session. Since all career employees are automatically
eliminated from consideration for this exemption, enrollment hours will
not be verified for 1500-hour and part-time faculty positions.
-
An exception to the half-time enrollment requirement will be granted for
students who need fewer hours in order to graduate in the current semester
or summer school session. Notification of pending graduation must be sent
to the Payroll Office in order to be granted this exception. A "Tentative
Graduate Form" must be completed and submitted to the Payroll Office.
-
Services performed by a student are eligible for the FICA exemption with
respect to all services performed during all payroll periods of a month
or less that fall wholly or partially within the academic term (defined
as from the first day of classes through the last day of exams). Since all
wage payrolls are for two-week periods, the last payroll period for an
academic term may include services performed by a student after the
semester ends and still be FICA exempt.
-
The FICA exemption does not apply to services performed by a student who
is not enrolled in classes during school breaks of more than five weeks
(summer break) with the exception of Item 4 above. The FICA exemption does
apply to services performed by a student who is not enrolled in classes
during school breaks of five weeks or less (between Fall and Spring
Semesters).
-
If a part-time faculty member (generally teaching one class) is also a
graduate fellow or assistant who is eligible for the FICA exemption, the
graduate fellow/assistant=s position will take precedent over the
part-time faculty position and the FICA exemption will be allowed for
both positions.
Part-time administrative positions will be evaluated on a case-by-case
basis to determine qualification for the student FICA exemption. Any
student who is paid $600 per month or less as a part-time administrator
and who is enrolled at least on a half-time basis will receive the student
FICA exemption. Any student who is paid more than $600 and who is enrolled
at least on a half-time basis will be evaluated for career employee
status and will receive the student FICA exemption if not determined to
be a career employee. If the career employee determination is
questionable, then the Assistant Vice President for Financial Services
will make the final decision.
-
Student employees are allowed to work multiple positions on campus. If a
student is determined to be a career employee, then all positions for
that student will be deemed FICA taxable. All positions for each student
will be reviewed for FICA taxability.
NOTE: Until an automated system which will track multiple payrolls is
developed, this policy cannot be implemented. Manual detection is too
labor intensive and is not cost effective. However, for any student who
is detected, the policy will apply.
- For students with an F-1 visa, see FICA Exemption for Students with an F-1Visa policy.