Since the late 1970s, the United States has established a network of bilateral social security agreements that coordinate the U.S. social security program with similar programs in other countries. This article provides a brief overview of the agreements and should be of particular interest to multinationals and people who work abroad during their careers. The United States has signed totalization agreements with four countries in the FBU Poland service area: the Czech Republic, Hungary, Poland and Slovakia. Information on all existing social security agreements can be found on the International Programs Overview website. The United States has agreements with several nations, the so-called totalization conventions, in order to avoid double taxation of income in relation to social contributions. These agreements must be taken into account in determining whether a foreigner is subject to the U.S. Social Security Tax/Medicare or whether a U.S. citizen or resident alien is subject to the social security taxes of a foreign country. Although many countries have multilateral totalization agreements (especially among members of the European Union), U.S. agreements are required by law to be only bilateral.
Therefore, if a worker earns 6 or more QCs and has additional working time in each of the two countries with which the United States has a totalization agreement, only the coverage periods of one country or another can be combined with the QCs to entitle these workers. The agreements also contain provisions preventing SSAs from taking into account periods of foreign coverage that were earned prior to the creation of the U.S. Social Security Program in 1937 or that overlap with coverage periods already credited by U.S. law. In the absence of a totalization agreement, a large number of workers who work or are self-employed in another country, as well as employers in the first country, face the prospect of paying social security contributions to two countries with the same income. For example, a U.S. employer may send a U.S. worker to another country to continue his or her employment.
In the absence of a totalization agreement, the employer and the worker are generally required to pay social security contributions on the worker`s income in the United States and the host country. When a foreign employer sends a worker to the United States to continue his or her employment, the employer and the worker often have to pay double taxes on social security, unless that country and the United States have a totalization agreement. If you have any questions about international social security agreements, contact the Social Security Administration`s Office of Data Exchange, Policy Publications and International Negotiations (ODEPPIN) after surfing our website. For questions about the rules for coverage of agreements, please visit (410) 965-7306. If you would like to find out more about individual services or services, please contact the Office of Earnings and International Operations.