F1 / H1B transition and bonus treatment

rogerme · Post by **rogerme** » Mon Aug 13, 2012 12:46 am

Hello,

I have a question about the treatment of bonuses for a F1 to H1B transition.

My F1 OPT began on June 2011 and ended June 2012, at which point I transferred to a H1-B visa. During my F1 OPT period, I did not have to pay FICA or medicare. I was also paid a bonus in August 2012 for my period of work from June 2011 to June 2012. My question is, since the bonus is for the period when I am on OPT, should FICA or Medicare be deducted from my bonus?

Thanks for your help!

nelsona · Post by **nelsona** » Mon Aug 13, 2012 4:09 pm

What does your HR say?

rogerme · Post by **rogerme** » Mon Aug 13, 2012 7:53 pm

The HR contact was pretty clueless, and hence I decided to consult some of the experts on here.

Thank you!

nelsona · Post by **nelsona** » Tue Aug 14, 2012 2:53 am

If it is paid to while you are in H status with that firm, FICA should be deducted, since it will be paid out on your paycheck which will be fica required.
Only if you left the firm would it be clear that you were getting OPT related funds.

rogerme · Post by **rogerme** » Tue Aug 14, 2012 11:12 am

Thanks!
I see... so I need HR to explicitly point out that the bonus is for the OPT period in order for FICA to not be deducted?

nelsona · Post by **nelsona** » Tue Aug 14, 2012 12:10 pm

No... you would need to get a separate paycheck... which is unlikely.

Your bonus WILL be subject to FICA, because it is being paid to while you are an H1 employee

rogerme · Post by **rogerme** » Wed Aug 15, 2012 10:05 am

Actually, I just checked and saw that my bonus was in a separate paycheck. I received a paycheck for my biweekly pay, and an additional paycheck for my bonus.

nelsona · Post by **nelsona** » Wed Aug 15, 2012 10:50 am

Great.. best outcome for you, since it is unlikely that you would ever benefit from that extra fica applied to your SS account.

rogerme · Post by **rogerme** » Thu Aug 16, 2012 10:58 am

Thanks nelsona.

I talked to HR again (this time a more experienced person), and she said that I would have to pay FICA on the bonus, even if it's a separate paycheck and for the period I was on OPT.

=(

nelsona · Post by **nelsona** » Thu Aug 16, 2012 11:43 am

Oh well. That was my original feeling.

If this was closer to the end of the year, it might have benefitted you, as it may have resulted in qualifying for the 4 quaters you can get in 2012. But now that you are paying fica evey week, you will get your 4 quarters anywys -- which come with about $5000 of wages

All it will give you now is a bigger 'year' of contributions, which will translate to pennies if you ever get SS.

rogerme · Post by **rogerme** » Sun Aug 19, 2012 10:18 am

Thanks for your help nelsona!