Sponsor
Thomas Bryant Cotton
Senator · R-AR
Removes FICA/Social Security exclusion for OPT, making OPT wages subject to Social Security and Medicare payroll taxes.
Senator · R-AR
The bill brings F-1 OPT workers into Social Security coverage and improves payroll tax compliance (increasing receipts modestly), but reduces take-home pay for those students, raises employer payroll costs, and creates administrative burdens that could deter OPT participation and hiring.
F-1 students working on OPT will earn Social Security credits and be covered by Social Security benefits for work performed after enactment.
Employers hiring OPT participants will report wages and remit FICA, creating clearer tax treatment and improving payroll tax compliance.
Payroll tax contributions from OPT employment will modestly increase Social Security and Medicare receipts over time, supporting program funding.
International students on OPT may be discouraged from pursuing or accepting U.S. internships because higher FICA withholding reduces take-home pay and raises the effective tax cost of OPT.
F-1 students on OPT will experience immediate reductions in net pay due to required employee FICA withholding, lowering their take-home earnings.
Employers will incur higher labor costs from employer FICA/Medicare contributions for OPT hires, which may reduce demand for OPT workers and pressure small-business hiring.
Based on analysis of 2 sections of legislative text.
Official title: Amend the Internal Revenue Code of 1986 to include optional practical training for F-1 visa holders and employment for purposes of taxes under the Federal Insurance Contribution Act and the Social Security Act.
Introduced September 30, 2025 by Thomas Bryant Cotton · Last progress September 30, 2025
Makes wages earned while participating in Optional Practical Training (OPT) subject to Social Security and Medicare payroll taxes by removing the prior statutory exclusion for OPT service from the Federal Insurance Contributions Act and the Social Security Act. The change applies to services performed in calendar months beginning after the date of enactment, so OPT participants will start owing and employers will start withholding FICA taxes for OPT wages after that effective date.