The Internal Revenue Service (IRS) excludes from social security and medicare coverage services performed by students employed by a college or university provided the student is enrolled at least half-time and regularly attending classes. To be excluded from social security and medicare taxes a student employee must be an undergraduate student enrolled in 6 units per term OR a graduate student enrolled in 4 units per term.
Student employees not meeting the enrollment requirement of 6 units (4 units for graduate students) are required to pay 7.5% of all earnings into a State-sponsored retirement plan (PST) in lieu of Social Security coverage. Student employees are also subject to medicare taxation, currently 1.45%, which is paid by both the student and the employing department. Student employees who are required to contribute to the state-sponsored PST retirement plan may request a refund of retirement contributions upon separation from university employment. Retirement contributions are subject to federal and state taxation at the time of withdrawal.
To request a refund or for further questions:
- Visit the Savings Plus Program website at www.savingsplusnow.com
- Review the fact sheet
- Call Savings Plus at (855) 616-4776