LAWRENCE — A little more than 1,100 former medical students at the University of Kansas Medical Center have received nearly $18 million in Social Security and Medicare refunds. The refunds represent Social Security and Medicare taxes, plus interest, withheld from the paychecks of the former medical residents from Jan. 1, 1993 to March 31, 2005, the Kansas Department of Administration said. The Internal Revenue Service agreed to issue refunds for this period following successful lawsuits by medical schools who claimed medical residents were students and therefore exempt from Social Security and Medicare taxes. However, the IRS clarified the rule, which says medical residents are full-time employees of teaching hospitals rather than students and don’t qualify for the student tax exemption. The IRS’s rule change was upheld by the US supreme court. The state will receive $25 million, representing the employer’s share of withholding.
Updated 8/6/13 @ 10:05 pm
