IRS Owes Some of You Money

TMA has learned that if you were in residency or fellowship training between Jan. 1, 1995, and March 31, 2005, you may qualify for a refund of Federal Insurance Contributions Act (FICA) taxes collected on your stipend during that time. 

In March 2010, the Internal Revenue Service (IRS) determined that residents were exempt from FICA taxes, based on the student exception, for that 10-year period. But the exemption ended when new IRS regulations took effect April 1, 2005. IRS now disqualifies residents and fellows from continued exemption from the FICA tax because they work at least 40 hours per week. FICA taxes consist of Social Security and Medicare taxes.

If a training institution filed a refund claim on your behalf, with your consent, contact the graduate medical education office there to determine if you are due a refund. Many have received refunds already, so this could definitely be worth your while. 

For more information, call IRS at (800) 919-1703, or review the Questions and Answers posted on the IRS website. 

Action, April 1, 2013