A-to-Z Index

Student Employment FICA Exemption

Updated: September 2008

Background

The Internal Revenue Code imposes a tax on employers and employees referred to as the Federal Insurance Contributions Act (FICA). The Code, however, contains a number of exceptions to the FICA tax, one of which exempts services performed for a college or university by a "student who is enrolled and regularly attending classes" at the institution.


Guidelines

A student employee of James Madison University is eligible for this exemption if the following conditions are met:

  1. The student employee must be enrolled and attending classes on at least a half-time basis, either in an undergraduate or graduate program of James Madison University. Per the University Registrar's guideline, half-time basis equates to at least six credits taken each term for undergraduate students; and at least five credits taken each term for graduate students.
  2. The student employee must not be eligible to receive benefits from James Madison University that are offered to non-student positions. These benefits include but are not limited to the 403-b annuity program, the state retirement program or the tuition waiver benefit.

Other requirements:

The FICA exemption is eligible to the student employee who starts to work a month or less before the semester in which he/she is enrolled as a half-time student or more. The exemption is also available for the student employee who completes working for JMU within a month of the completion of the semester in which he/she was enrolled as a half-time student or more.

The FICA exemption is not eligible for a student employee during summer break if he/she is not enrolled at James Madison University on at least a half-time basis during the summer semester.

The FICA exemption does not apply to any other University break if that break extends more than five weeks in length.

A student employee status as half-time will be determined at the end of the drop-add period each semester.

If you have questions in regard to this Internal Revenue Code, contact Payroll Services at 540/568-6233.