Home / Education / US May Tax Foreign Student Earnings
US May Tax Foreign Student Earnings
4 Dec, 2025
Summary
- US considers taxing foreign OPT workers' earnings with FICA taxes.
- Proposed 'OPT Fair Tax Act' ends employer FICA tax exemption.
- New tax could reduce US appeal for international students.
A proposed bill in the United States, the 'OPT Fair Tax Act,' aims to impose FICA taxes on earnings of foreign students participating in the Optional Practical Training (OPT) program. This legislation would eliminate existing tax exemptions for employers hiring these international workers, requiring both employees and employers to contribute to Social Security and Medicare taxes for the first time.
The potential implementation of FICA taxes on OPT earnings could significantly impact the United States' standing as a preferred study abroad destination. Experts suggest that reduced take-home pay for students and increased hiring costs for companies might deter future international student enrollment, especially in science, technology, engineering, and mathematics fields where OPT is widely utilized.
Furthermore, organizations like the Federation for American Immigration Reform (FAIR) are advocating for the termination of the OPT program altogether. If FICA taxes are enacted, or if the program faces termination, international students may explore alternative countries offering more favorable or stable labor market conditions for post-graduation work experience.
