OPT Tax Filing for Indian Graduates

Yes — federal income tax, and usually state income tax, on your OPT wages. What you generally should not be paying is Social Security and Medicare tax, because as an exempt individual in F-1 status you are ordinarily outside FICA. So the correct answer is that OPT income is taxable but should be taxed differently from a normal employee's. If your pay slip shows Social Security and Medicare deductions, that is worth checking rather than assuming it is right.

Almost always because their payroll system treated you as it would any other new hire, not because anyone assessed your status. The exemption depends on your being a non-resident alien in F-1 status, which is not something a payroll onboarding form reliably captures. It can be recovered: first by asking the employer to correct it and refund you, which is the faster route, and failing that by claiming it from the IRS with supporting documentation. Note that if your five exempt calendar years are already used up, the withholding may be correct and no refund is due — which is why the status determination comes first.

Not directly, but it very often changes your tax status by extending how long you are in the country. The 24-month STEM extension frequently carries a graduate past the five exempt calendar years, and at that point the substantial presence test starts to apply normally: you become a resident filer, you file Form 1040 instead of 1040-NR, FICA becomes correctly due, and your Indian bank accounts come within FBAR and possibly Form 8938. The work permit changed nothing; the passage of time changed everything.

That is typically a dual-status year: non-resident for the OPT part and resident from the point you met the substantial presence test. A dual-status return is more involved than either alternative and it restricts some benefits — you generally cannot file jointly or take the standard deduction on the resident portion, although the India student article may still assist for the earlier part of the year. There is also a first-year-choice election that can produce a better result in some cases. The two treatments give materially different tax, so both should be computed rather than defaulting to whichever is easier.

No. Both are employment authorisations attached to F-1 status, and for tax purposes the analysis is identical: your exempt-individual years, your resident or non-resident status, and whether FICA applies. What differs is timing — CPT happens during your programme and OPT after it — so CPT earnings are more often small and partial-year, and more often accompanied by scholarship or assistantship income that needs separating from wages on the return.

Yes, for as long as you are an exempt individual, and it is filed together with your Form 1040-NR rather than instead of it. Having a job does not remove the Form 8843 requirement — the form documents your exempt status, and the wages are reported on the return. Once your exempt years are exhausted and you file as a resident, Form 8843 no longer applies.