Congress quietly exempts foreign workers from Social Security taxes
S. 2940 — OPT Fair Tax Act · Filed by Tom Cotton (R-AR) · Introduced Sep 30, 2025 · Referred to committee
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What it does
This bill exempts F-1 visa holders participating in Optional Practical Training (OPT) from paying Social Security and Medicare taxes (FICA) on their wages. Currently, F-1 students on OPT are treated as employees for tax purposes and must contribute to these programs; this bill removes that requirement, allowing them to keep more of their earnings while reducing the Social Security and Medicare trust funds' revenue.
Why we flagged it
The bill's operative mechanism is a targeted tax exemption — it removes a class of workers (F-1 OPT participants) from payroll tax obligations. This is a narrow tax relief provision, not a broad policy reform, and it benefits a specific visa category at the expense of Social Security/Medicare revenue.
What the text implies
- Reduces Social Security and Medicare payroll tax revenue without corresponding benefit reductions or appropriations, potentially accelerating trust-fund depletion or requiring higher contributions from other workers.
- F-1 OPT workers remain eligible for Social Security benefits upon future employment or permanent residency, creating a scenario where they receive benefits without having contributed during OPT years.
The full analysis lists 4 implications of this text.
Who stands to gain
F-1 visa holders on Optional Practical Training; employers hiring F-1 OPT workers (reduced payroll tax liability)