Paying FICA taxes that employer forgot to withhold

Question

My visa status changed from F1 to H1B in 2017, but my employer forgot to withold FICA taxes for me since the visa status change. (I'm a full-time employee who received a W2, and am not an independent contractor.) I already filed my taxes for 2017.

What is the best option for me to have the FICA taxes paid correctly, out of the three options below?

1. File an amended return along with "Form 8919, Uncollected Social Security and Medicare Taxes on Wages". (Will I have to pay a penalty in this case, although the mistake was on my employer's part?)

2. Ask my employer to correct the mistake with IRS, and I then my employer can collect my share of the taxes from me. (But will I have any problems with the IRS such as an audit, since the W2 in the return that I originally filed shows no FICA taxes withheld?)

3. Wait for the IRS to reply to my tax return, and ask them for the best way to resolve the unpaid FICA taxes. (Again, will I have any problems with the IRS such as an audit in this case?)

[This is not a duplicate of other similar questions, as none of them talks about Form 8919 as a possible option to address the problem. Form 8919 was introduced a few years ago, but mainly for those who receive a Form 1099 from the employer treating them incorrectly as an independent contractor, instead of a Form W2.]

[When answering, I'd really appreciate it if you could also specify your experience/background that makes you believe that your answer is credible and the correct choice, or if you are just speculating. Thanks a ton!]

Answer 1

According to this Journal of Accountancy article:

If the employer discovers the error after the calendar year of the wage payment closes, the employer also provides the employee and the Social Security Administration a corrected Form W-2 (Form W-2c) reflecting additional FICA earnings, if applicable, for the prior year and FICA tax withholding as if the employer had made it correctly.

This change to FICA wages and FICA tax withholding generally does not affect the employee’s prior-year individual tax return. The regulations provide a specific remedy to allow an employer to recover from the employee’s pay the FICA taxes that the employer paid on the employee’s behalf (Treas. Reg. § 31.6205-1(d)(1)). If the employer does not recover the amount from the employee, the payment of the employee share of FICA tax by the employer is current wage compensation subject to FICA and income tax withholding and is reflected on the employee’s year-end Form W-2.

Looks like you should inform your employer about this, and let them handle the situation thenceforth.