Kansas Department of Administration

98-P-023 Issuance of IRS Revenue Procedure 98-16

DATE: February 16, 1998
SUBJECT: Issuance of IRS Revenue Procedure 98-16
EFFECTIVE DATE: February 2, 1998
CONTACT: Payroll Services (785) 296-3146
APPROVAL: Image of approval signature.
SUMMARY: New IRS Standards for Student FICA Withholding Exceptions


Please be advised that the Internal Revenue Service has issued Revenue Procedure 98-16 in Internal Revenue Bulletin 1998-5. Revenue Procedure 98-16 details new IRS standards for determining if the wages of student workers are excluded from FICA withholding. In accordance with the Revenue Procedure, the substantiation requirements for colleges and universities in determining their student's FICA status are greatly simplified. Following are some key portions of the Revenue Procedure:

Copies of Internal Revenue Bulletins are available on the Internet at the IRS website located at http://www.irs.ustreas.gov.

Regents Institutions are responsible for properly determining the FICA status of employees at their institution and for withholding the correct tax amounts.


  • Standardization of the definitions of 'student'
  • Elimination of the IRS '12/20 rule'
  • Permission for each college or university to determine the appropriate number of credit or unit hours that qualify their students for the FICA exclusion
  • Exclusion of FICA withholding to services performed by a student during school breaks up to five weeks in length


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