Farming is a seasonal business, and in some seasons -- particularly during the harvest -- a shortage of labor occurs. The H-2A visa allows temporary or seasonal agricultural workers entry into the United States. Agricultural employers who are unable to meet seasonal labor demands from the local workforce arrange for these guest workers, for which the Internal Revenue Service sets the federal Social Security tax rules.
Social Security Taxes
Social Security is a federal public pension system for U.S. workers who benefit by a monthly retirement benefit as well as disability insurance if a medical condition forces them out of work. The vast majority of workers in the United States pay Social Security taxes through a regular payroll deduction, which in 2012 amounted to 4.2 percent of gross wages (the employer share was 6.2 percent). Self-employed individuals pay the full tax rate of 10.4 percent.
H-2A Visa Holders
The IRS does not require all workers in the United States to pay Social Security tax. The agency exempts agricultural workers who arrive on H-2A visas. This is true for both legal residents and non-resident aliens who must return to their country of origin when their visa expires.
Employers report wages to workers and to the IRS each year on IRS Form W-2. The form gives the total earnings of the worker, as well as any income and Social Security taxes that have been withheld -- H-2A visa holders, under certain circumstances, are subject to income tax. No Social Security tax withholding may be reported for H-2A visa holders, as none of the worker's wages are subject to Social Security tax, nor are nonresident H-2A visa holders subject to self-employment tax, which other workers pay to the IRS to fund their Social Security accounts.
In the case of resident workers who hold H-2A visas, the IRS also exempts their income from Social Security tax if they contribute to a public pension system in their country of origin and the United States has a Social Security "Totalization Agreement" with that country. The worker must provide a certificate of coverage in order to claim the exemption.
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