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FICA "Student Exemption" For Residents Faces Tough Scrutiny From the IRS

According to four IRS directives and newly proposed IRS regulations, resident physicians are not eligible for FICA student exemptions at the vast majority of teaching hospitals. The IRS says it will hold teaching hospitals to the standard of proof intended for all such "student employee" exemptions.

The FICA student exemption is designed to apply to students who are part-time employees working directly for the school, college, or university where they are enrolled and pay tuition, and where they regularly attend classes. This is not a description of the usual resident physician's employment situation.