US Eyes Ending OPT Tax Break for International Students
A senior US senator has proposed legislation to remove tax exemptions for international students on Optional Practical Training (OPT).
The OPT Fair Tax Act, introduced by Republican senator Tom Cotton, seeks to remove payroll tax breaks for international students on the US’s postgraduation work route who generally cannot access the social security benefits that the taxes fund.
Our tax code shouldn’t incentivise businesses to hire foreign workers. By ending the FICA tax exemption, we will put American workers first.
If implemented, the legislation would end the current rule that exempts international students on OPT from paying social security and healthcare taxes, known as Federal Insurance Contributions Act (FICA), on their US earnings.
The FICA exemption creates an 8% hiring cost advantage when employers choose international students over US workers at identical salaries.
According to Boston College professor Chris Glass, this change would impact the hiring process.
- Remove tax exemptions for international students on OPT
- End the FICA tax exemption for international students
Author's summary: US senator proposes ending tax breaks for international students.
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