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Financial Affairs
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FICA Refunds for Medical Residents
As you may know, Georgetown University (GU) filed claims for refund of FICA tax paid during calendar years 1994 through June 30, 2000 on behalf of GU medical residents. FICA includes the Social Security and Medicare taxes.
On March 2, 2010, the Internal Revenue Service issued the following statement:
IR-2010-25, March 2, 2010
WASHINGTON — The Internal Revenue Service has made an administrative determination to accept the position that medical residents are excepted from FICA taxes based on the student exception for tax periods ending before April 1, 2005, when new IRS regulations went into effect.
The IRS will, within 90 days, begin contacting hospitals, universities and medical residents who filed FICA (Social Security and Medicare tax) refund claims for these periods with more information and procedures. Employers and individuals with pending claims do not need to take any action at this time.
In January 2011, GU filed perfected claims with the IRS for refund of FICA tax paid during Calendar years 1994 through June 30, 2000. Included in the claim where the FICA tax amounts withheld from former residents who had returned signed consent forms.
If you have consented to have GU process the refund claim on your behalf, it is your responsibility to contact GU with your current address if it changes during the pendency of the refund claim. Please send future address change information to Georgetown_MRFICA@us.pwc.com
On January 11, 2011, the Supreme Court held that medical residents are employees for purposes of the FICA tax. The 8-0 decision upheld regulations issued by the Treasury Department that wages earned by medical residents working 40 hours or more per week are subject to FICA taxes. This decision applies only to quarters beginning after March 31, 2005; it does not affect a former resident's potential right to a refund for quarters previous to April 1, 2005 as discussed above.
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Tax Accounting