Who Is Exempt From Social Security and Medicare Withholding?

Most workers pay 6.2% of their wages in Social Security tax and 1.45% in Medicare tax, with the employer matching both. A narrow set of workers is exempt from one or both of these payroll taxes, and the question of who is exempt from Social Security and Medicare withholding usually comes down to nine categories: students employed by their own school, children working in a parent’s unincorporated business, certain nonresident visa holders, workers covered by an international totalization agreement, some state and local government employees, federal workers still under the older CSRS pension system, election workers earning below a yearly threshold, members of qualifying religious sects, and ministers who have received IRS approval for a self-employment tax exemption.

Each exemption has strict conditions, and several require you to file a specific form. Claiming one you don’t qualify for is a withholding error; claiming one you do qualify for often means giving up future benefit credits for those years.

Students Working for Their School

If you are enrolled at least half-time at a college or university and you work for that same school, your wages are generally exempt from Social Security and Medicare taxes. The job must be with the school where you are enrolled, or with a related tax-exempt organization that directly supports it, and the employment must be connected to your studies.¹

Both undergraduates and graduate students can qualify under the IRS safe harbor as long as they carry at least a half-time course load as defined by their institution.² The exemption does not cover career employees who happen to be taking classes on the side. The IRS looks at whether the relationship is primarily educational rather than primarily a job, weighing things like hours worked and how the position fits into your degree program.

In your final semester, you can still qualify with fewer than half-time credits if those are the remaining requirements for your degree. The exemption does not extend to outside employers just because they happen to be on campus.²

Children Working in a Parent’s Business

Wages paid to a child under age 18 by a parent are exempt from Social Security and Medicare taxes if the business is a sole proprietorship or a partnership in which both partners are the child’s parents.³ For domestic work performed in a parent’s private home, the age cutoff is 21 rather than 18.

The exemption disappears if the business is a corporation, or if the partnership includes anyone besides the child’s parents. In those setups, ordinary FICA rules apply.³ Keep records of the child’s duties, hours, and pay rate, and pay a rate that is reasonable for the actual work.

A common misconception: spouses do not get this treatment. If your spouse works for your trade or business, their wages are subject to Social Security and Medicare taxes like anyone else’s. Spousal wages are exempt only from federal unemployment tax.⁴

Nonresident Students and Exchange Visitors

If you are a nonresident alien in the United States on an F-1, J-1, M-1, or Q-1 visa, wages you earn carrying out the purpose of that visa are not covered employment for FICA purposes.¹ The visas cover, respectively, academic students, exchange visitors, vocational students, and international cultural exchange participants.

What matters is your tax residency status, not just the visa in your passport. Students and exchange visitors on these visas are treated as “exempt individuals” for the substantial presence test during their initial years in the country, so their days in the U.S. do not count toward becoming a resident alien for tax purposes.⁵ To preserve that status, you must file Form 8843 with your tax return each year. Miss the filing, and you can be treated as a resident alien, at which point the FICA exemption no longer applies.

Some nonresidents who would otherwise meet the substantial presence test can claim the closer connection exception on Form 8840. Qualifying requires fewer than 183 days of U.S. presence during the year, a tax home in a foreign country, and a stronger connection to that country than to the United States.

Workers Covered by a Totalization Agreement

The United States has social security agreements, called totalization agreements, with dozens of countries. They exist to prevent the same earnings from being taxed by two national systems at once.⁶

The general rule under these agreements is that you pay into the system of the country where you physically work. The main exception is for workers temporarily transferred by their employer. If the assignment is expected to last five years or less, you generally stay covered only by your home country and are exempt from the host country’s social security taxes. You need a certificate of coverage from the country that continues to cover you.⁶ The same works in reverse for U.S. employers sending workers abroad.

State and Local Government Employees

State and local government workers were not automatically included in Social Security when the program was created. Each state instead enters into a Section 218 agreement with the Social Security Administration, choosing which groups of public employees are covered.⁷ These agreements cover positions, not individuals, so whether Social Security tax applies to your paycheck depends on whether your specific position is included in your state’s agreement.

If your position is not covered by a Section 218 agreement and you belong to a qualifying public retirement system, your wages are exempt from Social Security tax. Medicare coverage, however, has been mandatory for state and local government employees since 1986, so you still pay the 1.45% Medicare tax.⁸⁹ If you are a state or local employee not covered by a Section 218 agreement and not enrolled in a qualifying retirement system, both Social Security and Medicare taxes apply.

Federal Employees Under CSRS

Federal workers covered by the Civil Service Retirement System generally do not pay Social Security tax, but they do pay the 1.45% Medicare tax.¹⁰ CSRS employees contribute 7% to 8% of their pay to the CSRS pension instead. Workers under the Federal Employees Retirement System, which replaced CSRS for newer hires, pay full Social Security and Medicare taxes. The active CSRS-only workforce continues to shrink as those employees retire.

Election Workers Below the Annual Threshold

Pay for working at a polling place or performing other election duties for a state or local government is exempt from Social Security and Medicare taxes as long as it stays below a yearly threshold. For 2026, the threshold is $2,500.¹¹ Once your election-worker pay reaches or exceeds that figure in a calendar year, the full amount becomes subject to FICA.

Members of Recognized Religious Sects

If you belong to a recognized religious group that has existed continuously since December 31, 1950, that conscientiously opposes public or private insurance including Social Security and Medicare, and that has an established practice of caring for its dependent members, you can apply for a FICA exemption.¹²

For an employee to use this exemption, both you and your employer must belong to the same qualifying sect. The employer applies for exemption from its share of FICA, and you file separately for exemption from your share.¹³ If your employer is not a member of the same sect, this employee-side exemption is not available, though you could still qualify for the self-employment version if you have self-employment income.

The application is Form 4029, “Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits.” By signing it, you waive all rights to Social Security and Medicare benefits, whether based on your own earnings or anyone else’s, and you confirm you have never received any such benefits.¹⁴

The exemption lasts as long as you remain a member of the qualifying group and continue following its teachings. Leaving the sect or ceasing to follow its tenets ends the exemption, and you must notify the IRS within 60 days. The waiver of benefits itself is irrevocable: you cannot go back and reclaim credits for the years you were exempt.¹⁴

Ministers and Christian Science Practitioners

Ministers, members of religious orders who have not taken a vow of poverty, and Christian Science practitioners can apply on Form 4361 for an exemption from self-employment tax on their ministerial earnings. This one is available on an individual basis, but it must rest on genuine religious or conscientious opposition to public insurance rather than financial reasons.¹⁵

The filing deadline is the due date of your income tax return, including extensions, for the second tax year in which you earned at least $400 in net self-employment income from ministerial services. The two qualifying years do not need to be consecutive. Once the IRS approves the application, the exemption is irrevocable.¹⁵

If FICA Was Withheld and You Were Exempt

Start with your employer. Employers are required to make reasonable efforts to repay or reimburse workers for overcollected FICA before seeking their own refund from the IRS.

If the employer will not or cannot fix it, file Form 843, “Claim for Refund and Request for Abatement,” directly with the IRS. Attach a copy of your W-2 showing the amount withheld and an explanation of why the withholding was incorrect. Include a statement from the employer about whether they have already repaid you or claimed a credit; if you cannot get one, explain why and provide the same information from your own records.¹⁶

You generally have three years from the date you filed the return reporting those wages, or two years from the date the tax was paid, whichever is later.¹⁷ Miss the deadline and the refund is gone.

1
Office of the Law Revision Counsel. 26 USC 3121 – Definitions
2
Internal Revenue Service. Student FICA Exception
3
Internal Revenue Service. Family Employees
4
Internal Revenue Service. Married Couples in Business
5
Internal Revenue Service. Substantial Presence Test
6
Social Security Administration. U.S. International Social Security Agreements
7
Social Security Administration. Section 218 Agreements
8
Social Security Administration. Introduction to State and Local Coverage
9
eCFR. 42 CFR 406.15 – Special Provisions Applicable to Medicare Qualified Government Employment
10
Office of Personnel Management. CSRS Information
11
Social Security Administration. Employment Coverage Thresholds
12
Office of the Law Revision Counsel. 26 USC 1402 – Definitions
13
Office of the Law Revision Counsel. 26 USC 3127 – Exemption for Employers and Their Employees Where Both Are Members of Religious Faiths Opposed to Participation in Social Security Act Programs
14
Internal Revenue Service. Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits
15
Internal Revenue Service. Topic No. 417, Earnings for Clergy
16
Internal Revenue Service. Instructions for Form 843, Claim for Refund and Request for Abatement
17
Internal Revenue Service. Time You Can Claim a Credit or Refund