Medical Resident Exception to FICA Tax

Discussion in 'General Residency Issues' started by medsRus, Dec 2, 2008.

  1. medsRus

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    United States v. Mount Sinai Medical Center (11th Cir. May 11, 2007) states:

    We hold that the services performed by medical residents are not categorically ineligible for the student exemption from FICA taxation.

    What does this mean for medical residents?
     
  2. dragonfly99

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    It means there is a fight over this. A few programs (Mayo I think?) have tried to say that they are paying residents a stipend and they are not employees, and thus the hospital doesn't have to pay FICA taxes on them, and the residents don't have to pay them either. However, the IRS has generally held that residents are NOT students, and we do have to pay. If you try to not pay, be prepared to have the IRS come after you, and you'll probably end up paying in the end, plus probably paying a penalty. So to me it isn't worth the risk right now. Most residencies still subtract the FICA tax from your wages every month so they are treating residents like employees.
     
  3. medsRus

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    I am curious to know which programs are on board?
     
  4. dragonfly99

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    If by "on board" you mean trying to challenge the policy that residents have to pay FICA taxes, Mayo is the only one I know about. I think there is ongoing court/litigation stuff going on, but I'm really not sure.

    I personally think residents should pay FICA. Essentially we are treated like employees. I think we should get other employee benefits = to other employees in the medical center as well. That usually happens, but not at some programs. In my mind it's stupid to say residents don't have to pay FICA when all kinds of other people in similar training status have to. Don't the pharm. residents, nursing residents, etc. have to pay? Also, poor people have to pay this. Why should we get an out? Also, there are benefits to paying in to the social security system...if I get hit by a truck tomorrow I am now eligible for benefits.
     
  5. medsRus

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    Well, there are disability insurance programs (many provided/offered by residency programs) for this... Why rely on SSDI?
     
  6. exPCM

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    Briefing on issue:
    http://www.ama-assn.org/ama1/pub/upload/mm/16/fica_briefing.pdf
    What a joke
    If residents are students then they should not have to pay FICA tax.
    If residents are employees then how about getting employee benefits at the hospitals where they are employed such as paid maternity/paternity leave, retirement plans, dental insurance, paid holidays, bonuses, etc.

    Only at hospitals with resident unions do the residents seem to make significant headway on issues concerning fair treatment of residents:
    http://cirseiu.localsonline.org/docUploads/CIR%20News-9-07-final.pdf

    PAs and NPs are entitled to overtime pay but residents get no overtime pay:
    http://dallas.injuryboard.com/workplace-injuries/nurse-practitioners-and-physician-assistants-entitled-to-overtime-pay.aspx?googleid=202486
     
  7. masterofmonkeys

    masterofmonkeys Angy Old Man
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    residents aren't treated like employees when it comes to a lot of employee welfare issues, and are in fact specifically excluded from a number of labor reform laws. In fairness then, they shouldn't have to pay FICA. But it isn't about fairness. Plus we'll all be 'rich' someday so it's ok to abuse us.

    If Obama's tax plan comes to fruition, then our FICA would end up being rebated to us anyway.
     
  8. dragonfly99

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    <If residents are students then they should not have to pay FICA tax.
    If residents are employees then how about getting employee benefits at the hospitals where they are employed such as paid maternity/paternity leave, retirement plans, dental insurance, paid holidays, bonuses, etc.>

    I agree that residents should get employee benefits. I would rather have those than forfeit those and NOT have to pay the FICA. I always felt I was treated as an employee and not really like a student, either - I mean, students don't get paid and they don't really provide direct patient care independently at all.

    At the hospitals where I have worked, we did get to participate in the retirement plan, got dental insurance, and paid maternity/paternity leave (pretty positive about the last one, though I haven't had any babies!). We did get screwed over on the annual holiday bonus, though, which I do think is stupid. Residents are some of the main people providing the patient care so if there is a surplus/hospital is in the black we should have been some of the FIRST to get a bonus!
     

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