On March 2, 2010, the U.S. Internal Revenue Service (IRS) announced the exemption of medical residents from Federal Insurance Contributions Act (FICA) taxes based on the student exception for tax periods ending before April 1, 2005, when new IRS regulations went into effect. As such, the IRS will refund FICA taxes for individual medical residents and institutions that file refund claims for tax periods ending before April 1, 2005.
Since the announcement, the IRS has contacted hospitals and universities as well as medical residents who filed FICA refund claims for these periods with more information and procedures, and many ACC members have already received their reimbursements. Those who were in a residency/fellowship program in the U.S. between 1995 and 2005 are encouraged to contact their respective program's office of graduate medical education to see if they qualify for the tax refund claim.
The medical resident FICA tax refund claims stem from a decision of the U.S. Court of Appeals for the Eighth Circuit in 1998 in State of Minnesota v. Apfel which held that stipends paid to University of Minnesota medical residents in 1995-96 were not subject to FICA tax as a result of the student FICA exception. Since the decision of the Eighth Circuit in 1998, other U.S. Courts of Appeals have rendered decisions regarding medical residents' eligibility for the student FICA exception, and all have held that medical residents are or could be eligible for the student FICA exception.
For more information, call 1-800-919-1703 or visit www.irs.gov/charities and click on "Medical Resident FICA Refund Claims."