CONTACT: STEVE PARROTT
5 Old Capitol
Iowa City IA 52242
(319) 335-0557; fax (319) 335-0558
More than 1,100 UI students to receive payroll tax refunds
IOWA CITY, Iowa -- More than 1,100 University of Iowa student employees
will soon receive refund checks for FICA (Social Security) payroll taxes
paid during the first two months of 1998. The UI will be issuing more than
$52,000 in refunds. Students who are due refunds should receive their checks
some time next week.
The refunds stem from new guidelines issued earlier this year by the
Internal Revenue Service. Under the new guidelines, most students who are
enrolled at least half time are exempt from having FICA taxes withheld
from wages earned through university employment. The usual employee contribution
to FICA is 7.65 percent of the total paycheck.
The new IRS guidelines and refunds affect only a minority of the UI's
student employees. Refunds will go to undergraduate students who worked
more than 20 hours a week and to graduate and professional students who
worked more than 30 hours a week. Most students working less than that
were exempt from the FICA payroll taxes under the old guidelines and will
remain exempt under the new guidelines as well.
The FICA payroll exemption does not apply to wages earned by students
through non-university employment.
Additional refunds may be issued to students who paid FICA taxes for
university work dating back to February of 1996, the date when the old
FICA guidelines became effective. But UI officials warn that it could take
up to three years to obtain that money from the IRS. There's also the possibility
that the IRS may deny the UI's request for refunds for that time period.
Students who may be due a FICA refund for calendar years 1996 and 1997
should keep the Registrar's office apprised of any changes in address.
The UI will be sending letters to those students asking for their permission
to apply for a FICA refund for those years. Changes of address can be sent
to: Office of the Registrar, 1 Jessup Hall, University of Iowa, Iowa City,