S. 2940: OPT Fair Tax Act

This bill, known as the OPT Fair Tax Act, has been introduced to amend the Internal Revenue Code and the Social Security Act. The key changes proposed by this bill include the following:

1. Inclusion of Optional Practical Training as Employment

The bill specifically states that optional practical training (OPT) for F-1 visa holders will be acknowledged as employment for tax purposes. This change means:

• Individuals on F-1 visas who participate in OPT will no longer be exempt from certain tax obligations under the Federal Insurance Contribution Act (FICA) and the Social Security Act.
• They will be required to pay Social Security and Medicare taxes on their earned income during their OPT period.

2. Amendments to Existing Laws

To implement this change, the bill proposes amendments to two main sections of federal tax law:

• **Federal Insurance Contribution Act**: The bill modifies Section 3121(b)(19) to remove the exemption for F-1 visa holders participating in OPT, meaning they will be treated as employees for tax purposes.
• **Social Security Act**: Similarly, Section 210(a)(19) of the Social Security Act will also be amended to reflect that these individuals are subject to Social Security taxes.

3. Effective Date

The amendments made by this bill will take effect for services performed in calendar months that begin after the bill is enacted into law.

Relevant Companies

None found