W2 from Univ with no FICA

[BHoffman]

I'm sure this is common, but I've never seen it before. Client has a W2 from a State University with no SS or Med tax withheld. What do I do with this?

Thanks for any advice.

[okie1tax]

W2 no FICA

I am winging this. My memory is like a sieve these days. Medical students, at least, can receive wages from the university with no FICA in certain circumstances. This would be a starting point. I am home with no reference material except what's on the web and I am not good with search terms. TaxAlmanac.com is one place to search as there was a discussion there last year.
Try this http://www.taxalmanac.org/index.php/T.D._9167 Copy into your browser.

[Y2KEA]

I have seen this before. Students working fOr the university are exempt from FICA/MDCR.

[taxxcpa]

No SS Withheld.

I'm sure this is common, but I've never seen it before. Client has a W2 from a State University with no SS or Med tax withheld. What do I do with this?

Thanks for any advice.

It may be like teachers in public schools which do not participate in SS. My wife had no SS or MCare WH when she taught in the public schools. My daughter is a principal in a public school and they withhold Medicare only since those who started later than my wife did are required to pay Medicare. Some Schools elected to participate in SS and others did not.

I would not be concerned about it.

[BHoffman]

I will not be concerned about it

Thanks for quick responses.

What about students who get 1099-MISC forms for doing research or grad student work? Are they subject to SE tax?

[oceanlovin'ea]

Based on the other discussion that was here last week, if it is a one time thing or NOT their business, then it would not be subject to SE tax. It would go on line 21 as additional income only.

Linda

[okie1tax]

W2 no FICA

Background
This document contains amendments to 26 CFR part 31 under sections 3121(b)(10) and 3306(c)(10)(B) of the Internal Revenue Code (Code). These sections except from “employment” for Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) purposes, respectively, service performed in the employ of a school, college, or university by a student who is enrolled and regularly attending classes at such school, college, or university. In addition, this document contains amendments to 26 CFR part 31 under section 3121(b)(2). This section excepts from employment for FICA purposes domestic service performed in a local college club, or local chapter of a college fraternity or sorority, by a student who is enrolled and is regularly attending cases at a school, college, or university

[BHoffman]

Thanks okie1tax. I think that clears up the W2 question.

I'm still holding the bag here with this 1099-MISC that was issued to a grad student from a charter school and have contacted the client to get some further clarification. Not sure if this was independent contractor payment for student teaching or what. I would think they should have issued a form W2, but not sure what a charter school might do.

I'm reporting it on Sch C and not sure about the SE tax. If no SE tax, then it gets a corresponding "misc expense" to show no income on Sch C, and then report on line 21? What a mess.

[Snaggletooth]

Line 7

Beth, it is still wages. I have this a few times every year. Report on line 7 with wages, and no social security attaches.

[FEDUKE404]

Frequent situation for college students

I've seen plenty of W2s for college students where no FICA/Med is withheld. It is extremely common, and has nothing to do with the school "participating" in Soc Sec.

As for the Form 1099-MISC stuff, best I can tell no one should ever have to pay SE tax on same for any number of creative reasons. That's pretty much what I have gleaned from some earlier posts on the topic. Just say you "were not in business" or simply don't work too long when the what most tax people would call "employment income" is generated.

FE