Archive · 29 Oct 2025
US Considers Ending Tax Exemption for Indian Students on OPT
Imagine students from India come to America to study.
After they finish school, they can get a special permission called OPT to work for a little while in their field.
Usually, when people work in the US, a small part of their paycheck goes to something called FICA taxes, which helps pay for things like Social Security and healthcare for Americans.
But students on OPT didn't have to pay this tax.
Now, a US Senator wants to change this rule.
He has proposed a new law, the 'OPT Fair Tax Act', which would make these students pay the FICA tax just like everyone else.
The Senator says this is to make sure American workers get jobs first.
However, the students are worried because they will have to pay this tax but won't be able to get the benefits of Social Security or healthcare in the US.
This means they would be paying money without getting anything back, which feels unfair to them.
US Senator Tom Cotton has proposed the 'OPT Fair Tax Act' that could end tax exemptions for international students on the F-1 visa's Optional Practical Training (OPT) program.
The proposed legislation aims to impose FICA taxes (Social Security and Medicare) on OPT and STEM OPT workers.
Currently, these international workers are exempt from FICA taxes under existing US tax codes.
Proponents argue the act will disincentivize hiring foreign workers and prioritize American citizens for jobs.
Critics highlight that approximately 97,000 Indian students could be impacted, facing financial hardship as they would pay taxes for benefits they are not eligible to receive.
- Who
- US Senator Tom Cotton and the US Congress are considering the 'OPT Fair Tax Act'.
- What
- The proposed act seeks to end FICA tax exemptions for international students on the Optional Practical Training (OPT) program.
- When
- The legislation has been recently proposed in the US Congress.
- Where
- United States
- Why
- To discourage US employers from hiring foreign workers and to prioritize American citizens for jobs.
Supporters of OPT Fair Tax Act
Critics of OPT Fair Tax Act
Impact on Hiring and American Workers
Supporters of OPT Fair Tax Act
The act aims to remove incentives for US employers to hire foreign workers, thereby prioritizing American citizens for jobs.
Critics of OPT Fair Tax Act
This act could lead to significant financial burdens on international students, forcing them to pay taxes for benefits they cannot receive, potentially leading to financial hardship.
Purpose of FICA Tax
Supporters of OPT Fair Tax Act
FICA taxes fund essential social programs like Social Security and Medicare, suggesting a universal contribution is fair.
Critics of OPT Fair Tax Act
International students on OPT would be contributing to Social Security and Medicare without being eligible to receive these benefits, making it an unfair financial obligation.
- Legislation Name
- OPT Fair Tax Act
- Proposed By
- US Senator Tom Cotton
- Target Group
- International students on F-1 visa participating in Optional Practical Training (OPT) and STEM OPT
- Current Situation
- F-1 OPT and STEM OPT workers are currently exempt from FICA taxes.
- Proposed Change
- End tax exemptions, requiring OPT workers to pay 7.65% of their salary towards Social Security and Medicare.
- Number of Indian Students Affected
- Approximately 97,000
- Reason for Proposed Change
- To disincentivize hiring foreign workers and prioritize American workers.