F-1 OPT tax calculator

Why OPT pay is not taxed like H-1B pay

Most F-1 students are nonresident aliens for tax purposes during their first five calendar years in the United States, and nonresident students working under OPT or CPT are exempt from Social Security and Medicare tax on those wages. That exemption is 7.65% of gross pay — on a $75,000 OPT salary it is more than $5,000 a year. Payroll departments get this wrong in both directions: some withhold FICA from exempt students, and some keep the exemption running after the student has become a resident.

The second difference is the standard deduction. Nonresident aliens generally cannot take it, so federal tax applies from the first dollar of wages. The main exception is students from India, who can claim it under the US–India tax treaty. Resident aliens take it like anyone else.

How to use this estimator

1. Enter your annual OPT or CPT wages and the state you work in.
2. Choose your tax residency for the year. If you are unsure, run the substantial presence test first — and remember F-1 exempt years do not count toward it.
3. Tick the India treaty box only if you are a student from India claiming the standard deduction on Form 1040-NR.

What this tool simplifies

• Approximate federal brackets; no tax credits
• Illustrative state rates — not every state or city
• No treaty exclusions of wage income (several treaties exempt a first slice of student earnings — check yours)
• No scholarship, stipend, or investment income
• Does not model a dual-status year

If FICA was withheld and you were exempt

Ask your employer to refund it first — payroll can usually correct the current year. If they will not, you can claim the refund from the IRS with Form 843 and Form 8316. Keep your pay stubs and your I-20 and EAD as evidence of status. The F-1 student tax guide walks through the filing side.