Find A CPA or EA Who Understands Your Specific Tax Issues
CPAs & EAs:
Add your firm to our site!

Visit The MDTAXES Network Message Board for Healthcare Professionals Message Board
 |  Latest Topics  |  Chat

  Author   Comment  
Andrew Schwartz CPA
Reply with quote  #1 
Please remember to post whatever you hear or read regarding this FICA issue on this forum.  The IRS keeps losing in the courts.  Hopefully at some point you and your colleagues will be entitled to receive a refund of the FICA and Medicare taxes paid while completing your medical residency. 

On a stipend of $50k, you would have paid in $3,750 of FICA and Medicare taxes.  Multiply that by three or four years, and you're talking about a good amount of money.
eric wollins
Reply with quote  #2 

So now what...? Is there no central organization spear heading this? Any clue on how and when we may be entitled to a refund of our FICA money?

Doug Garrison
Reply with quote  #3 

I graduated residency in 1994.  Is that too long ago for this to apply to me?

Reply with quote  #4 
I saw this posting on a website and thought this was interesting. I don't know if this letter is suggesting a trend toward acknowledging the fact that we all know that medical residents are students and should be treated as such for tax purposes.

Highlights from this article:
(dated 4/9/2009)
"While the IRS and the Department of Justice (DOJ) scored some early victories in several district court decisions, the Second and Sixth Circuits have recently joined the Seventh, Eighth, and Eleventh Circuits in holding that the student FICA tax exception under Internal Revenue Code (the Code) section 3121(b)(10) is not inapplicable to medical residents as a matter of law."

"Like the Sixth Circuit, the Second Circuit remanded the cases to their respective district courts to conduct a factual inquiry as to whether the medical residents are
“students” and the teaching hospitals “schools."

Here's the link for the article:

Reply with quote  #5 
My institution recently sent me a letter asking for me to consent to allow them to file a claim for potential FICA tax refund. I was a resident/fellow between 2002-2009.

Does anyone know what I lose by signing the consent form? Why would my institution do this for me? are they 'that nice?' (doubtful)

Can I still do this by myself? Am I still eligible to claim the refund? which years?

Andrew Schwartz CPA
Reply with quote  #6 
Back in 2001, I wrote an article about this FICA tax refund that you can find at  Here is what I wrote as the downside of signing onto a class action:

What's the Downside?

As in all cases, there's a downside which needs to be addressed prior to making your final decision. A few potential pitfalls are as follows:

  • First, the retirement benefit you ultimately receive from social security might be reduced if you receive a refund of social security taxes paid in during your residency. Remember, to collect social security, you need to pay into the system for 10 years. Plus, your benefit is based on your 35 years of highest earnings.

  • Also, if you moonlighted, and your combined salary and moonlighting income exceeded the social security maximum for that year, you might owe more in self-employment taxes than you would get back in social security taxes.



So if neither of these issues affect you, I'm not aware of any reason to not sign onto the class action that the hospital is undertaking.  From what I've seen, you will only get back the FICA taxes if the hospital deals directly with the IRS on your behalf.

Andrew Schwartz CPA
Reply with quote  #7 

We've moved this Forum to:

Please post any future posts at that new location.

Previous Topic | Next Topic

Quick Navigation:

Create your own forum with Website Toolbox! by CPANiche, LLC  800.471.0045  fax 800.547.3366  Email us at