My daughter worked in a "work-study" job in 2010 where she goes to college (4 year, undergrad) . I believe these jobs are 80% Federally subsidized at colleges.
On her W-2, they did not withhold any SSI or Medicaid tax. Is this because the amount of her income is so small ($450) or something related to this being a Federally subsidized opportunity?
Thanks,
Let's clear up your terminology first. SSI is not a tax that is withheld. It's income to certain people who are collecting Social Security Benefits. Medicaid is health insurance for low-income people who are usually collecting welfare.
Social Security (a/k/a FICA) and Medicare taxes are not withheld on the income of students who are working less than 20 hours a week for the school. It has nothing to do with any subsidy. In theory, the job is related to their education.
Gary
Not sure what 80% federally subsidized means.
It's most likely because she is a student working at a specified college job (like teachers assistant or research assistant). In this case you are exempt from social security and medicare taxes.
Student Exception to FICA Tax
FICA (Social Security and Medicare) taxes do not apply to service performed by students employed by a school, college, or university where the student is pursuing a course of study. Whether the organization is a school, college, or university depends on the organization?s primary function. In addition, whether employees are students for this purpose requires examining the individual?s employment relationship with the employer to determine if employment or education is predominant in the relationship.
If you're a student and work at an off-campus job, then you do have to pay FICA taxes.
Thanks...
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