Every day we read the news and view countless stories of politicians debating over the future of student loans and the overall cost of attending college. While there is merit in looking towards the future, working college students need solutions right now to help them deal with the exponentially rising cost of tuition.The FICA Student Tax exemption is a way to remove taxes from a student’s paycheck, allowing them to have more disposable cash.
Students who work less than 80% of the week and are enrolled with at least 6 academic credits can apply for this exemption; in the summer, workers need only be taking 6 credits if they are a undergrad or 2 if they are graduate students. This is what the government deems “half-time enrollment”. Students who do not meet the half-time enrollment requirement need to contribute the usual 7.5% of their income to DCP, or the Defined Contribution Plan and 1.45% to Medicare.
Wait, what is the DCP?
The Defined Contribution Plan is an alternative to Social Security. It is usually used by some universities as a deferred retirement number.