Residency

News and briefs: IRS to reimburse former medical residents

Residency Program Insider, January 24, 2012

Want to receive articles like this one in your inbox? Subscribe to Residency Program Insider!

According to an article in the Cleveland Plain Dealer, residents, fellows, and the hospitals they practiced at from January 1, 1997 to March 31, 2005 will receive a tax refund from the IRS. Residents paid Federal Insurance Contribution Act (FICA) taxes as employees, instead of being classified as students, who are exempt from such taxation.

The IRS changed its definition of “student” in 2005, which returned them to “employee” status, but has promised to deliver a refund to qualifying individuals and hospitals who filed FICA return claims. The U.S. Supreme Court recently upheld a pair of appeals court decisions that residents are currently defined as employees and subject to FICA taxes.

An IRS spokesperson says in the article that the majority of the FICA claims will be paid out by September 30, ending a 20-year battle on the issue.

To read more, click here.

 



Want to receive articles like this one in your inbox? Subscribe to Residency Program Insider!

Most Popular