International Students on OPT May Face Higher US Taxes Under Proposed DIGNITY Act
International students on OPT in the US may soon lose their tax exemption and face higher deductions from their earnings under a proposed law.
International students working in the United States under the Optional Practical Training (OPT) program may soon face a higher tax burden if a new immigration bill, the DIGNITY Act of 2025, becomes law. The DIGNITY Act, introduced in July 2025 by U.S. lawmakers María Elvira Salazar and Veronica Escobar, includes a proposal to remove a key tax exemption currently enjoyed by OPT...
International students working in the United States under the Optional Practical Training (OPT) program may soon face a higher tax burden if a new immigration bill, the DIGNITY Act of 2025, becomes law.
The DIGNITY Act, introduced in July 2025 by U.S. lawmakers María Elvira Salazar and Veronica Escobar, includes a proposal to remove a key tax exemption currently enjoyed by OPT students.
At present, international students on F-1 visas who work under the OPT program are generally not required to pay Social Security and Medicare taxes, also known as FICA taxes, during their first five years in the country. This is because they are treated as non-residents for tax purposes under U.S. IRS rules.
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The new bill proposes to eliminate this exemption. If passed, students on OPT would have to pay 6.2 percent of their income toward Social Security and 1.45 percent toward Medicare. Employers would also be required to pay the same amounts.
In total, the cost of FICA taxes would rise to 15.3 percent of a student’s earnings. For example, a student earning $40,000 a year would lose approximately $3,060 from their income, reducing their take-home pay.
The OPT program allows international students to work in the U.S. for up to 12 months after completing their studies, with an extension of 24 months for students in science, technology, engineering, and math fields. The new tax proposal has raised concerns among students and education advocates who say it could make the U.S. less attractive for foreign talent, especially when other countries offer more favorable work options for graduates.
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The DIGNITY Act includes positive steps such as visa reforms and legal status for undocumented immigrants, but this specific change could place a financial strain on international students. The bill is still in its early stages and faces an uncertain path in Congress. But if approved, international students may need to prepare for a new financial reality while working in the United States.
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