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If I work for a foreign company in a foreign country do I have

Resolved Question:

If I work for a foreign company in a foreign country do I have to pay social security and medicare taxes. If I do not does it reduce my social security benefits when I start drawing it. I have paid into SS for 50 years before working for the foreign company.
Submitted: 2 years ago.
Category: Business Law
Expert:  JerrySJD replied 2 years ago.

JerrySJD :

Norally, you do pay SS. You file a 1040NR and then file in the foreign country too. You take a tax credit for foreign taxes paid, so you do not pay twice. This way, your social security will get credited, but you do not have to pay full tax in two coutries.


 

JerrySJD :

As a "U.S. Person", you are required to file a 1040, in this case, a 1040NR. You are taxed (including SS) on your worldwide income. Then the U.S. will let you take a credit for the foreign taxes paid. A good tax preparer can help you with this, or you can try to bang it out yourself. Make sure to file the form for a Foreign Tax Credit.


 

JerrySJD :

Thank you for using JustAnswer. Please click "Accept". If you need more, just let me know.


 

Customer:

I understand all this but my question is as an American working for a Foreign Company (not self employed) in a foreign country....

Customer:


If I work for a foreign company in a foreign country do I have to pay social security and medicare taxes. If I do not does it reduce my social security benefits when I start drawing it. I have paid into SS for 50 years before working for the foreign company.

Customer:


I work for a foreign company in a foreign country do I have to pay social security and medicare taxes. If I do not does it reduce my social security benefits when I start drawing it. I have paid into SS for 50 years before working for the foreign company.

JerrySJD :

I see. /the foreign company will not withhold and pay social security.

JerrySJD :

Whether the foreign company is required to pay depends on whether there is a Totalization Agreement in place with that country.

JerrySJD :
  • If You are working in one of the countries with
    which the United States has entered into a binational social security agreement
    (also known as Totalization Agreements), and the agreement provides that your
    foreign employment is subject to U.S. social security and Medicare taxes, then it is paid. Otherwise no.
  • JerrySJD :

    That means your ss benefits will be lower or you will have no benefits in usa for ss. However, you may qualify for benefits in that country, even if you move back to the USA.


     

    Expert:  JerrySJD replied 2 years ago.

    Totalization Agreements


    Under a Totalization Agreement, dual coverage and dual
    contributions (taxes) for the same work are eliminated. The agreements generally
    make sure that you pay social security taxes to only one country.

    Covered by U.S. only. If your pay in a foreign country is subject only
    to U.S. social security tax and is exempt from foreign social security tax, your
    employer should get a certificate of compliance from the Office of International
    Programs of the Social Security Administration.


    Covered by foreign country only. If you are permanently working in a
    foreign country with which the United States has a social security agreement
    and, under the agreement, your pay is exempt from U.S. social security tax, you
    or your employer should get a statement from the authorized official or agency
    of the foreign country verifying that your pay is subject to social security
    coverage in that country.


    If the authorities of the foreign country will not issue such a statement,
    either you or your employer should get a statement from the U.S. Social Security
    Administration, Office of International Programs, at the address below. The
    statement should indicate that your wages are not covered by the U.S. social
    security system.


    This statement should be kept by your employer because it establishes that
    your pay is exempt from U.S. social security tax.


    Only wages paid on or after the effective date of the totalization agreement
    can be exempt from U.S. social security tax.


    Generally, under these agreements, you will only be subject to social
    security taxes in the country where you are working. However, if you are
    temporarily sent to work in a foreign country, and your pay would otherwise be
    subject to social security taxes in both the United States and that country, you
    generally can remain covered only by U.S. social security. You can get more
    information on any specific agreement by contacting the United States Social
    Security Administration. You can get more information from the Social Security International Program Web
    site
    .


    Preventing Double Payment of Social Security Taxes


    To establish that your pay in a foreign country is subject only to U.S.
    social security tax and is exempt from foreign social security tax, your
    employer in the United States should write to the:



    U.S. Social Security Administration
    Office of International
    Programs
    P.O. Box 17775
    Baltimore, MDNNN-NN-NNNN/p>


    Your employer should include the following information in the letter:



    1. Your name
    2. Your U.S. social security number
    3. Your date and place of birth
    4. The country of which you are a citizen
    5. The country of your permanent residence
    6. The name and address of your employer in the
      United States and in the foreign country
    7. The date and place you were hired
    8. The beginning date and the expected ending
      date of your employment in the foreign country

    Telephone inquiries should be directed to the numbers shown on the following
    page: International Operations-Contact Us by
    Phone
    .


    Your employer can request a Certificate of Coverage for his employees who
    work outside of the United States online by going to online certificate of coverage service.

    JerrySJD, Attorney
    Category: Business Law
    Satisfied Customers: 821
    Experience: Attorney for business formation, business sales, tax, partnerships, sole proprietors and buy/sell agreements.
    JerrySJD and 6 other Business Law Specialists are ready to help you
    Expert:  JerrySJD replied 2 years ago.

    Now that you see this response, do you feel more informed? We need to determine what country you are in for further review. We want you to be happy so that you do not feel you have bad service. I am sorry I did not fully address your question initially, but I am here to help you achieve a satisfactory resolution. Please write back with further inquiries.

    We are all about customer satisfaction and I will stay with you until you are satisfied.

    Expert:  JerrySJD replied 2 years ago.
    Were you able to see the Social Security International web site? Can you get your employer to send the letter to resolved the ss issue, so you only pay ss in one country? The HR department at the company should be able to assist you in this, as this comes up all the time with expats.

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