U.S. Supreme Court Upholds Regulation Denying FICA Exemption to Medical Residents

Medical Residents now required to pay FICA tax on thier wages.

Download PDFpdf-icon

In a unanimous opinion in Mayo Foundation for Medical Education and Research v. United States, Sup. Ct. Dkt. No. 09-837 (January 11, 2011), the Supreme Court upheld a Treasury regulation that makes medical residents ineligible for the student FICA tax exemption.  Since 1951, the regulation exempted from FICA taxation amounts received by students for performing work that is incident to and for the purpose of pursuing a course of study.  The regulation was amended in 2004 to clarify that the services of a full-time employee normally scheduled to work 40 or more hours a week are not incident to or for the purpose of pursuing a course of study.  The Supreme Court upheld the regulation, thus making medical residents, who typically spend between 50 and 80 hours a week caring for patients, ineligible for the exemption.

To read the full text of the Supreme Court’s opinion click here.