In a reversal of its prior position that medical residents are ineligible for the student exception from FICA taxes, the IRS announced that it will in fact honor the refund claims of residents, universities and hospitals made for tax periods ending before April 1, 2005, when final regulations on the subject took effect. The IRS previously argued that medical residents were not students and thus could not claim the student FICA exception. The IRS will continue to argue that medical residents are ineligible for the student exception for tax years ending after April 1, 2005.
See Fred Stokeld, "IRS WIll Honor Medical Residents' FICA Refund Claims," 2010 TNT 41-6, March 3, 2010.
Posted by Jenny Robertson, Associate Editor, Wealth Strategies Journal.
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