Taxes for (medical) residents

[mebisonII]

I thought this was interesting enough to warrant a new thread:


Haha just read that UND is suing the IRS for $1.8 million in tax refunds

Click Here (http://www.grandforksherald.com/articles/index.cfm?id=100299&section=News)

They are suing for tax refunds for employment taxes paid to residents. Their argument is that residents are students, so they are exempt from social security and Medicare taxes. I'm interested to keep an eye on this (personal implications), but I'm not sure I follow. Does being a student in other cases exempt you from those taxes? I paid taxes on what I made as a graduate student, but I had other-than-normal funding sources so that may have altered things. However, I thought all the other students technically paid taxes as well, but of course got most of it back because they made so little.

Or is the UND hospital seeking refunds on taxes they paid, rather than taxes with-held out of resident paychecks? i.e. the refund they are seeking would return to their pocket, not the residents. The article makes it sound like a little of both.

Anyone with any real knowledge want to fill me in?

[CarringtonBison]

I am actually one of the residents that is involved when I did my FP residency there. They sent me a letter explaining the lawsuit. i guess I don't care either way.... i was being paid so I guess I expected to pay taxes. made sense to me. If they get money back and send it my way, I am sure not going to argue or throw it away.

when i moonlighted (?moonlit) during residency I just got a 1099 and paid my own taxes on that separate income.

I think that the tax issue is a little of both....both the residents and school would get money back. otherwise what would they care it the residents paid taxes. i doubt that they are doing it to be nice to the residents, they are trying to get something out of it as well.

[mebisonII]

Can't blame you for that. I wouldn't complain if we didn't pay taxes on my wife's salary, despite that I think of her as more of an under-paid worker than a student :)