Certain groups, such as non-resident aliens, university employees, and medical students in residency, may receive a Social Security exemption from the IRS, allowing them to keep the amount deducted from their pay. The Amish also have an exemption due to their religious beliefs. Social Security funds programs like Medicare and Medicaid for the elderly and poor.
A Social Security exemption is permission given by the United States federal government to certain groups of people to abstain from paying Social Security taxes. These taxes are paid by the vast majority of income-earning Americans as a way to fund the Social Security program, which is used to provide benefits to the elderly once they have passed normal working age. Among the groups included are non-resident aliens working in specific tasks, students employed in colleges and universities, and medical students doing their residencies. In addition, members of the religious group known as the Amish have a Social Security exemption.
The United States has several social security programs designed to provide benefits to those who otherwise could not afford them. Among these are Medicare and Medicaid, which provide medical benefits to the elderly and the poor, respectively. Social Security is intended to fund those people who have grown too old to earn money for themselves through work. This program is financed through taxes both for the people who earn some type of income and for the people who employ them.
However, in some cases, certain groups may receive a Social Security exemption from the Internal Revenue Service (IRS). Unlike most people who have Social Security taxes automatically withheld from their earnings each week, people with exemptions are allowed to keep the amount that is usually deducted from their pay. Because this is so, a Social Security exemption can be of great financial benefit to those who qualify.
There are some groups that qualify for a Social Security exemption and therefore should alert the IRS of their eligibility. University employees are eligible for the exemption as long as their primary focus at the university is being a student. Nonresident aliens who work in the United States for foreign governments, on foreign ships, or those who work certain jobs while attending US schools, have an exemption. Additionally, medical students who are currently in the residency stage of their education are exempt from Social Security taxes.
Perhaps the most prominent case of a group having a Social Security exemption relates to the Amish religious group. The Amish opposed Social Security taxes, arguing that one of the tenets of their religion is that families should be responsible for the care of their elders. After protracted clashes between the IRS and the Amish, the 1965 Medicare bill passed by the United States Congress included a provision that the Amish would be exempt from social security taxes.
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