US Colleges Say Hiring US Students a Bad Deal

theodp writes "Many US colleges and universities have notices posted on their websites informing US companies that they're tax chumps if they hire students who are US citizens. 'In fact, a company may save money by hiring international students because the majority of them are exempt from Social Security (FICA) and Medicare tax requirements,' advises the taxpayer-supported University of Pittsburgh (pdf) as it makes the case against hiring its own US students. You'll find identical pitches made by the University of Delaware, the University of Cincinnati, Kansas State University, the University of Southern California, the University of Wisconsin, Iowa State University, and other public colleges and universities. The same message is also echoed by private schools, such as John Hopkins University, Brown University, Rollins College and Loyola University Chicago."

Comments

Re:Huh?

[UnknowingFool]

Agreed. The link is more of a FAQ to tell employers that international students can legally gain employment under certain conditions. They also advise employers of the tax situation and that employment must stop once the education stops. Nowhere does it advocate hiring international over U.S. students or what benefits are to using international students. While international students are exempt Social Security and Medicare it specifically says: "Unless exempted by a tax treaty, F-1 and J-1 students earning income under practical training are subject to applicable, federal, state, and local income taxes."

Re:Solution?

[Useful Wheat]

Did nobody actually read the linked documents? All of them are promoting hiring students from the university. They simply list what laws apply when a busness hires international students. All of them exist to clear up misconceptions people might have about hiring foreign students, so that they are not unfairly ignored in the hiring process.

For example, one question is "Does the student need a work permit to be hired" and the answer is no. The student cannot get a work permit until they have a written job offer, so any employer waiting for proof of a work permit before giving an interview is asking for the impossible.

I think Cmdrtaco should read TFA.

Re:Tax Exempt?

[Anonymous Coward]

If you are a foreign student and graduate from the US normally you start on your F-1 (practical training for one year) and then switch to an H1B. J-1 visas are mostly for people in universities since it's for visiting scholars.

Do not take things out of context! What the document says is companies might save some money if they hire foreigners on F-1 or J-1 visas. It is just so foreigners _who_study_in_the_United_States_ can find a job since employers seem to be under the impression that hiring a foreigner is a hassle. This would not apply to foreigners that get any other kind of visas. Also, the F-1 or J-1 visas do not last forever. Once you graduate you can extend it at most one year. Once you are on an H-1 visa you have to pay social security, medicare and everything everyone pays.

Still, to actually get the H-1 visa _is_ a hassle unless the employer is a university.

Troll Story

[burnin1965]

This story should be tagged as a troll story.

First, the documents to which the article links were not written with the intention of convincing U.S. employers to hire students who are non-residents of the United States in place of students who are citizens. Non-resident students are likely no different than any other student in college and need supplemental income to pay for their education. The documents purpose is to enlighten employers about the facts about hiring non-resident students who are in the country on a student visa. Perhaps the author would like to take it one step further and see if they can incite hatred in legal aliens who are here working under a green card as these pamphlets surely must be convincing U.S. employers to hire foreign students studying under a visa in place of legal immigrant workers. Or perhaps not.

Second, if the author bothered to read IRS Publication 519, as the pamphlets suggest, they would have realized that any foreign student studying under a visa in the united states will fall under Social Security and FICA taxes if they are determined to have a substantial presence in the United States.

You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2008. To meet this test, you must be physically present in the United States on at least:

      1.

            31 days during 2008, and
      2.

            183 days during the 3-year period that includes 2008, 2007, and 2006, counting:
                  1.

                        All the days you were present in 2008, and
                  2.

                        of the days you were present in 2007, and
                  3.

                        of the days you were present in 2006.

If a foreign student spends any more time in the U.S. than is necessary to attend school then it is likely they will fall under the substantial presence test and an employer will be required to pay Social Security and FICA taxes for the student they hired. A foreign student who is only available to work a fraction of each year is not a threat to the resident work force or the social services systems paid for by that work force.

As a member of the unemployed I understand the difficulties many people are going through but we can maintain a semblance of intelligence and become informed before making poorly researched rants.

makes no difference for tax purposes

[ProfBooty]

both F-1 and J-1 are exempt.

http://www.irs.gov/businesses/small/international/article/0,,id=131635,00.html

F-visas, J-visas, M-visas, Q-visas. Nonresident alien students, scholars, professors, teachers, trainees, researchers, and other aliens temporarily present in the United States in F-1,J-1,M-1, or Q-1/Q-2 nonimmigrant status are exempt from Social Security / Medicare Taxes on wages paid to them for services performed within the United States as long as such services are allowed by the United States Citizenship and Immigration Services (USCIS) for these nonimmigrant statuses, and such services are performed to carry out the purposes for which they were admitted into the United States.

        * Exempt Employment includes:
                    o On-campus student employment up to 20 hours a week (40 hrs during summer vacations)
                    o Off-campus student employment allowed by USCIS
                    o Practical Training student employment on or off campus
                    o On-campus employment as professor, teacher or researcher
        * Limitations on exemption:
                    o The exemption does not apply to spouses and children in F-2, J-2, M-2, or Q-3 nonimmigrant status.
                    o The exemption does not apply to employment not allowed by USCIS or to employment not closely connected to the purpose for which they were admitted into the United States.
                    o The exemption does not apply to nonimmigrants in F-1,J-1,M-1,or Q-1/Q-2 status who change nonimmigrant status to a status which is not exempt or to a special protected status.
                    o The exemption does not apply to nonimmigrants in F-1,J-1,M-1, or Q-1/Q-2 status who become resident aliens for tax purposes.