The following information is distributed to student employees prior to the summer semester. While there is no action needed by the time coordinator, it is important to be familiar with the eligibility criteria to help answer questions that may arise from student employees.
FICA is a U.S. federal payroll tax. It stands for the Federal Insurance Contributions Act and is deducted from each paycheck. FICA helps fund both Social Security and Medicare programs, which provide benefits for retirees, the disabled, and children. (Source: U.S. Social Security Administration)
See UNL’s Social Security Tax Withholding policy. The following information is distributed to student employees prior to the summer semester. While there is no action needed by the time coordinator, it is important for them to be familiar with the eligibility criteria to help answer questions that may arise from student employees.
Withholding for Student Employees During Summer Sessions
To determine if a student employee is exempt from FICA withholdings during the summer sessions, the system compares enrollment data against employee personnel records. Students who are exempt from FICA withholdings during the Spring semester and do not register for any Summer credit hour classes will have FICA taxes withheld beginning the first full pay period after Spring commencement. Withholdings are initiated by the system and no action is needed by the time coordinator or student. To be exempt from FICA withholdings for the summer sessions, the student must register for the following minimum credits:
Graduate Student – 5 credit hours
Undergraduate Student – 6 credit hours
The credit hours are the total hours for all four sessions. The exemption dates are determined by the sessions in which the student is enrolled and payroll is being processed. The student becomes eligible for the exemption at the time they register for classes.
Example: If an undergraduate registers for six or more hours in May to be taken during various summer sessions, the student would be exempt for the entire summer. However, if the student registers for six hours in July to attend the second five-week session, the student’s exemption would begin with the payroll being processed at that point in time.
Final Semester: The minimum credit requirement for summer session is waived for students in their final semester or summer session as long as they are enrolled for the number of credit hours needed to complete the requirements for obtaining a degree. To qualify, students must submit a copy of the University of Nebraska Application for Degree Form to the Payroll Services Office.
Master’s degree Program Candidates in Their Final Semester and Ph.D. Candidates: With approval of the Dean of Graduate Studies, students in their final semester of a master’s degree program on the thesis option, or candidates for doctoral degrees registered for fewer than the minimum hours required for a full program, may be granted full-time or half-time status. To qualify for the FICA withholding exemption, eligible students must complete the UNL Certification of Full Time Graduate Status form online via https://go.unl.edu/gradfulltime.
Forty Hour Rule: Social Security and Medicare tax rules state if a student works forty or more hours per week on a “regular basis”, they will lose the FICA tax exemption even if they meet the full-time student criteria. The rules will interpret the student as being in a full-time position. UNL has defined a “regular basis” as forty hours per week for three consecutive pay periods.
100 % FTE Rule: When a PAF is submitted and a student’s employment percentage totals 100% FTE from all appointments combined, the student will lose the FICA withholding exemption.
Reduced Credit Hours: If a student is no longer registered for the minimum number of credit hours required for FICA exemption, they lose the FICA withholding exemption.