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Medical Resident FICA Forum
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Re: Should I Join Class Action?

Back in 2001, I wrote an article about this FICA tax refund that you can find at http://www.mdtaxes.com/news0201.html. Here is what I wrote as the downside of signing onto a class action:

What's the Downside?

As in all cases, there's a downside which needs to be addressed prior to making your final decision. A few potential pitfalls are as follows:

First, the retirement benefit you ultimately receive from social security might be reduced if you receive a refund of social security taxes paid in during your residency. Remember, to collect social security, you need to pay into the system for 10 years. Plus, your benefit is based on your 35 years of highest earnings.

Also, if you moonlighted, and your combined salary and moonlighting income exceeded the social security maximum for that year, you might owe more in self-employment taxes than you would get back in social security taxes.

So if neither of these issues affect you, I'm not aware of any reason to not sign onto the class action that the hospital is undertaking. From what I've seen, you will only get back the FICA taxes if the hospital deals directly with the IRS on your behalf.

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