Do F-1 visa holders have to pay self-employment taxes if they work as a 1099 contractor?

 No, F-1 visa holders who work as 1099 independent contractors are generally exempt from self-employment taxes (Social Security and Medicare taxes), as long as they meet the substantial presence test exemption under the Internal Revenue Code Section 3121(b)(19).

Key Points:

1. Exemption from Self-Employment Taxes:

   • F-1 visa holders are considered nonresident aliens (NRA) for tax purposes for the first five calendar years in the U.S.

   • Nonresident aliens are not subject to self-employment taxes, even if they work as independent contractors (1099).

2. Tax Status Matters:

   • If an F-1 visa holder remains in the U.S. for more than five years and passes the substantial presence test, they may be considered a resident alien for tax purposes and become subject to self-employment taxes.

3. Federal Income Taxes Still Apply:

   • Even though F-1 visa holders do not pay self-employment taxes, they are still liable for federal and state income taxes on their earnings.

4. Work Authorization Restrictions:

   • F-1 visa holders are generally not allowed to work as independent contractors or freelancers unless they have proper authorization (e.g., OPT, CPT).

What Should You Do?

• If you're an F-1 visa holder working as a 1099 contractor, make sure you have the necessary work authorization (OPT, CPT).

• When filing taxes, use Form 1040-NR (if you are a nonresident for tax purposes) and do not pay self-employment taxes unless you have become a resident alien.

Would you like help determining your tax residency status?