Not on the FICA-exemption list. Full 7.65% Social Security + Medicare from day 1. Generic calculators get this right but cap the SS at the prior-year wage base.
Substantial presence in year 1. Arriving partway through the year may leave you NRA for that calendar year — no standard deduction, single brackets only.
Treaty doesn't help most W-2 wages. The US-Canada / US-Mexico / US-Australia / India treaties prevent double taxation but do not exempt salary income.
How federal income tax works for O-1 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 O-1 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
O-1 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 O-1 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 O-1 planning
The interaction of (1) residency status, (2) standard-deduction eligibility, and (3) FICA
exemption means two O-1 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 O-1 holders subject to FICA?
Yes. O-1 holders are subject to full Social Security and Medicare from day 1 — the FICA exemption is only available to F-1, J-1, M-1, and Q-1 visa categories.
When does an O-1 holder become a resident alien for tax purposes?
Under the substantial presence test (183 days using the day-counting formula). Most O-1 holders qualify in year 2 if they were present full-year; year 1 may be split (NRA portion + resident portion).
Can O-1 holders claim the standard deduction?
Yes, once classified as a resident alien for tax purposes ($16,100 single, $32,200 MFJ for 2026). NRAs cannot.
Is O-1 income from foreign employers taxed differently?
O-1 status presupposes US employment, so virtually all O-1 income is US-source wages taxed under standard W-2 rules. Foreign-source income earned before US arrival or after departure may not be taxable depending on residency timing.