H-1B holders are generally tax residents under the substantial presence test (typically by their second calendar year, sometimes within the first). They are subject to full FICA (Social Security + Medicare) and can claim the standard deduction once classified as resident aliens for tax purposes.
The first-year-NRA trap. If you start H-1B mid-year (cap-subject Oct 1, for example) you may not pass the substantial presence test in year 1. As an NRA you lose the standard deduction and can't file MFJ — typically a few thousand dollars of extra federal tax.
Bonus withholding. Federal supplemental withholding is 22% (37% above $1M). California adds 10.23%. This is withholding, not the final tax — high earners often underwithhold.
FICA from day 1. H-1B holders are NOT on the FICA-exemption list. If you transitioned from F-1 OPT, FICA starts the day your H-1B is effective.
H-1B prevailing wages by occupation & metro
See actual median certified H-1B wages from DOL Labor Condition Application
filings, broken down by SOC occupation code and US metropolitan area.
How federal income tax works for H-1B holders (2026)
The US uses a progressive federal income tax with seven marginal brackets ranging from 10% to
37%. Each bracket only applies to the slice of income that falls inside it — not your whole
income. The bracket boundaries are inflation-adjusted every year by the IRS (
Rev. Proc. 2025-32).
2026 federal tax brackets
Rate
Single
Married filing jointly
10%
$0 – $12,400
$0 – $24,800
12%
$12,400 – $50,400
$24,800 – $100,800
22%
$50,400 – $105,700
$100,800 – $211,400
24%
$105,700 – $201,775
$211,400 – $403,550
32%
$201,775 – $256,225
$403,550 – $512,450
35%
$256,225 – $640,600
$512,450 – $768,700
37%
$640,600 +
$768,700 +
Source: IRS Rev. Proc. 2025-32 (TY 2026 inflation adjustments).
How taxable income is calculated
Federal tax brackets apply to taxable income, not to your gross salary.
The flow is:
Gross wages (Box 1 of your W-2)
− pre-tax 401(k), HSA, FSA, traditional pension contributions = adjusted gross income (AGI)
− standard deduction or itemized deductions = taxable income
Apply the bracket schedule above to taxable income → federal income tax owed
− tax credits (Child Tax Credit, foreign tax credit, etc.) = final federal tax
Standard deduction for H-1B holders
Once you are a resident alien for tax purposes, you can claim the standard deduction — $16,100 single, $32,200 married filing jointly for tax year 2026.
FICA: Social Security & Medicare
H-1B is not on the FICA-exempt visa list (only F, J, M, and Q categories are). Full Social Security and Medicare apply from your first US paycheck.
When FICA applies, your employer withholds:
Social Security: 6.2% on the first $184,500 of wages (2026 wage base)
Medicare: 1.45% on every dollar of wages, with no cap
Your employer pays a matching 6.2% + 1.45% on top — total payroll tax cost to the employer is
7.65% of your wages up to the cap. The employer match isn't withheld from your check.
Worked example: $100,000 single filer
Suppose you earn $100,000 on H-1B and qualify for the standard deduction.
Your taxable income is $100,000 − $16,100 = $83,900. Walking the brackets:
10% on the first $12,400 = $1,240
12% on the next slice up to $50,400
22% on the remainder up to $83,900
Total federal income tax owed: $13,170 — an
effective rate of 13.2% on your $100,000 gross.
This is before FICA (another 7.65%) and
before any state income tax.
Why this matters for H-1B planning
The interaction of (1) residency status, (2) standard-deduction eligibility, and (3) FICA
exemption means two H-1B holders earning the same gross salary can have very different
take-home pay. The calculator above models all three correctly for tax year 2026.
Frequently asked questions
Specific to this visa, state, and salary. Sourced to IRS, SSA, and state DOR.
Are H-1B holders subject to Social Security and Medicare?
Yes. H-1B holders generally meet the substantial presence test by their second calendar year (and sometimes within their first), at which point they are taxed as resident aliens for tax purposes — fully subject to Social Security (6.2% up to $184,500 in 2026) and Medicare (1.45% on all wages, plus 0.9% above $200k single).
Can H-1B holders claim the standard deduction?
Yes — once classified as a resident alien for tax purposes (after meeting the substantial presence test). For 2026, the federal standard deduction is $16,100 (single), $32,200 (MFJ), $24,150 (HoH).
What about the first calendar year on H-1B?
If you arrive late in the year (e.g. October 1st on cap-subject H-1B), you may not pass the substantial presence test in year 1 and may be a nonresident alien for that year. NRAs cannot claim the standard deduction and cannot file jointly. Many H-1B holders elect to use the "first-year choice" or wait until year 2 to file.
Are H-1B holders eligible for treaty benefits?
Most US tax treaties exclude H-1B holders from treaty benefits once they become resident aliens. Some narrow treaty articles still apply (e.g. tax on certain pensions or fellowship grants), but salary income is taxed under standard US rules.