Social security taxes are based on the wages, income, salary or commissions, etc., that a worker gets from their job. H-2A agricultural workers hired by employers in the US are exempted from paying the US Social Security and Medicare taxes.
Yes, they don’t have to pay for Security and Medicare Taxes, be it resident aliens or non-resident aliens. However, the agricultural services performed under the H-2A visa are subject to US federal tax if backup holding exists. If you are confused about the tax laws, you can visit a law firm for more details. Moreover, you can also visit their page for more details regarding the taxes paid by these workers. However, the agricultural services performed under the H-2A visa are subject to US federal tax if backup holding exists.
When it comes to H-2A workers, a common question that arises is whether they have to pay for social security charges. Or are they exempted from it? If yes, then in what conditions and requirements? Let us know more about it in this blog.
There is a lot of confusion among foreign agricultural workers regarding taxes. Federal taxes include income tax and Social Security and Medicare tax. These workers are expected to pay social security taxes, but they fail to understand that they must report their income to the IRS. They will have to file an income tax return on their wage at the end of their one year of service. To pay these taxes, an H-2A worker must fill out certain forms that are different for resident and non-resident aliens under the Internal revenue code.
The worker’s wages are exempt from social security taxes under the condition that their jobs are temporary and will last up to 1 year and not more than two years. Therefore, the compensation they receive from US employers is not considered regular wages, thus exempting them under the IRS (Internal Revenue System). No Social Security charges, but they are subject to paying income taxes.
- When you arrive at your employer’s farm, you must fill out certain forms, including Form W-2 or Form 943.
- To be excluded from the social security taxes, you must apply for a Social Security Number (SSN) or an ITIN and provide it to your employer.
- A failed procedure to produce the SSN will add your compensation to the backup holdings, and you will be required to pay income tax.
- The employer is not responsible for this failure and will continue to add to your backup withholding taxes unless the H-2A worker submits the SSN with official documentation.
- If you have submitted your SSN to your employer, then your boss can not deduct any social security charges.
- After this, the employer will fill out forms W-2 and form 1099-MISC. It will show your employer’s name and address, your name and address, the amount of money earned by you in your program, and your backup withholding, if any (income tax withholding).
- If your compensation is around 600 dollars or more, then the employer must report it on the W-2 form in box 1(wages, tips, and other compensations).
- No amount should be added to the social security tax section.
- The employer cannot withhold any income tax on the compensation of the work unless they fail to produce the SSN or ITIN on time.
It can be highly confusing to the workers who haven’t paid any taxes yet. A law firm can guide you through the whole process. Moreover, you can visit their page for more details. Taxes can be confusing, but when professionals guide you, you can be saved from a lot of troubles.