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 TN 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 TN 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
TN 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 TN 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 TN planning
The interaction of (1) residency status, (2) standard-deduction eligibility, and (3) FICA
exemption means two TN 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 TN visa holders (Canadian / Mexican professionals) subject to FICA?
Yes. TN status is not on the FICA-exemption list. Social Security 6.2% (up to $184,500 in 2026) and Medicare 1.45% apply from day 1.
Are TN holders eligible for the US-Canada or US-Mexico tax treaty?
The US-Canada and US-Mexico income tax treaties exist but do not exempt TN salary income from US tax once you are a US resident under substantial presence. They primarily prevent double taxation by allowing a foreign tax credit on the Canadian or Mexican return.
Can TN holders claim the standard deduction?
Yes once they are a resident alien for tax purposes. The US-Canada treaty does not extend the standard deduction to NRAs the way the US-India F-1 treaty does for students.
Does TN status affect state tax residency?
Each state defines residency independently of immigration status. Most states deem you a tax resident if you are domiciled there or spend more than 183 days in the state during the year.