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Self-employed but exempt from social security and medicare

I have a client who is a green-card holder who is self-employed (contract) with the U.N. As such, she is exempt from social security and Medicare, which means she doesn't have to pay the self-employment tax (because that's SS+MC).

She's not a minister or religious worker. But that's the only thing I see to select "not subject to SE tax." Should I just check that box, or will that screw things up elsewhere? Or is there something somewhere else that I can check that will suspend / cancel the SE tax correctly?

TIA

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7 Replies 7
PATAX
Level 10

That is very interesting information... I thought self-employed people that have a green card still had to pay self-employment tax but maybe I am wrong...Maybe the U.N. factors in...... just my opinion...

Yes, most green-card holders have to pay SE tax. It's only the UN work that makes her exempt.

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PATAX
Level 10

I would not check the box that the individual is exempt from SE tax because he is a minister because that is not a true statement... You may want to ask the client if he wishes to mail the return in via USPS certified mail with return receipt , then you can attach the documentation showing that he is exempt from self-employment tax as a U.N. employee... It may take longer to process but at least you will know that you have done the right thing .... This is just my opinion

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sjrcpa
Level 15

Are you sure the SE exemption applies to an independent contractor with the UN?

Are you sure it applies to a green card holder?

I know an employee of the UN with a G-4 visa will not have to pay social security tax. But that's all I know.


ex-AllStar

Yes, the customer printed out pages from an IRS publication. 

Well, okay. It's possible that the IRS pub is wrong. I know it's happened before. But if an IRS pub says it, I'm willing to go along.

Anyway, all this talk about whether or not doesn't answer my question.

How do I do it?!?!?!?

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sjrcpa
Level 15

I don't use ProSeries so I don't know.


ex-AllStar
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BobKamman
Level 14

The UN Secretariat has a detailed publication on this subject which does state that certain green card holders are exempt from self-employment tax even if they pay US income tax (which is then reimbursed by the UN).  But they must be in the category that can sign a "waiver" -- see the publication.  Technically these individuals are not "contractors," the term you use, but employees.

https://www.un.org/Depts/oppba/accounts/tax/pubs/sticlatest.pdf