OPT Fair Tax Act
- Bill Number
- H.R. 8972
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-05-21: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-23T18:24:05Z
AI-Generated Summary
H.R. 8972: OPT Fair Tax Act Summary
Purpose
This legislation aims to treat optional practical training (OPT) performed by F-1 visa holders as taxable employment under federal insurance contribution and Social Security laws, ensuring such work is subject to related payroll taxes.
Key Provisions
- Short Title: The bill is named the "OPT Fair Tax Act."
- Amendments to Tax Codes:
- Modifies Section 3121(b)(19) of the Internal Revenue Code of 1986 to remove the tax exemption for services by F-1 visa holders in optional practical training.
- Modifies Section 210(a)(19) of the Social Security Act (42 U.S.C. 410(a)(19)) with identical language to include OPT as employment.
- Effective Date: Changes apply to services performed in calendar months beginning after the date of enactment.
Significant Changes to Existing Law
- Current law under both the Internal Revenue Code and Social Security Act excludes certain services by nonimmigrants (including F-1 visa holders) from the definition of "employment" for FICA and Social Security tax purposes.
- The bill introduces an explicit exception, ending this exclusion specifically for F-1 students participating in OPT, thereby making their earnings subject to these taxes.
Potential Impacts
- On Government Agencies: The Internal Revenue Service and Social Security Administration may see increased tax collections and reporting requirements from employers hiring OPT participants.
- On Citizens and Visa Holders: F-1 visa holders in OPT programs would face new payroll tax obligations, potentially reducing take-home pay; employers may incur matching tax contributions.
- On International Relations: No direct effects specified, though the change could influence the attractiveness of U.S. student visa programs for international students.
Main Stakeholders Affected
- F-1 visa holders participating in optional practical training.
- Employers hiring such individuals.
- Universities and educational institutions sponsoring F-1 students.
- Federal agencies including the IRS and Social Security Administration.
Notable Legal, Constitutional, or Political Implications
- The amendments focus on tax treatment without altering immigration status or visa rules under the Immigration and Nationality Act.
- No constitutional issues are addressed in the bill; it operates within Congress's authority to define taxable employment.
- The measure targets a specific subset of nonimmigrant workers, potentially affecting labor market dynamics for international students without broader visa reforms.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-05-21: Referred to the House Committee on Ways and Means.
- 2026-05-21: Introduced in House
- 2026-05-21: Introduced in House
Bill Versions
- OPT Fair Tax Act — issued 2026-05-21 — PDF (2 pages)