International Implications of Social Security for Workers in the U.S.

Determining Eligibility, Withholding and Filing Requirements, Totalization Agreements and Exemptions

Recording of a 110-minute CPE webinar with Q&A


Conducted on Tuesday, December 5, 2017

Recorded event now available

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Program Materials

This webinar will provide employee benefit advisers with a thorough and practical guide to the complex area of social security coverage and withholding for inbound employees of U.S. companies. The panel will outline the statutory rules for how these individuals qualify for coverage, discuss the impact of totalization agreements on benefits coverage and withholding requirements, and detail documentation requirements for employers with impacted workers.

Description

Determining social security benefits coverage in the case of a U.S. taxpayer working for a U.S. company is relatively straightforward. For individuals performing services in the U.S., citizenship or residency is generally immaterial if they earn wages arising from “covered employment.” Outside the U.S. both the employment relationship and the citizenship or residency of the employee will impact benefits coverage.

Individuals who work in multiple jurisdictions during their career may risk losing social security benefits. Most countries, including the U.S., have minimum periods of coverage requirements in order to receive benefits. Individuals working in multiple jurisdictions may not meet these requirements, and risk paying withholding tax for benefits they will never receive.

The U.S. and other countries have taken steps to address this problem by entering into “totalization agreements,” treaty-force agreements that eliminate double social security contributions and allow affected wage earners to “totalize” their social tax retirement benefits by crediting periods of coverage in one country in determining eligibility for benefits in another. Tax advisers must understand the relevant treaty rules and documentation requirements to assist their clients in claiming totalization agreement benefits.

Also critical are the Medicare rules as they relate to non-citizens working in the U.S. Unlike SSA benefits, Medicare draws a major distinction between citizen and non-citizen beneficiaries. U.S. totalization agreements do not address Medicare, so employee benefits professionals as well as tax advisers must be able to explain the complex rules relating to Medicare coverage.

Listen as our experienced panel provides employee benefits professionals and tax advisers with practical guidance on social security coverage, contributions and benefits issues faced by international employees working in the U.S.

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Outline

  1. General Social Security Concepts
  2. Statutory Liability for U.S. Social Security Contributions
  3. Totalization Agreements
  4. Old Age Benefits
    1. Calculation of benefit in general
    2. Calculation of totalized benefit
    3. International Considerations
      1. Payments outside the U.S.
      2. Withholding on payments outside the U.S.
      3. Windfall Elimination Provisions
  5. Medicare Benefits
    1. General requirements for coverage
    2. Special requirements for non-citizens

Benefits

The panel will discuss these and other important topics:

  • What constitutes “wages” and “employment” for purposes of Social Security withholding on nonresident employees of U.S. employers?
  • What issues are present when a nonresident employee earns deferred compensation from a U.S. employer connected with services provided in the U.S.?
  • What documentation does the taxpayer need to obtain, submit and/or retain to support an exemption claim under totalization?
  • How do the “detached worker” exception and the “five-year” rule operate?
  • Calculating Social Security benefits under a totalization arrangement

Faculty

Finch, Stacy
Stacy Finch
Vice President, International Compensation & Benefits
Marriott International

Ms. Finch has over 20 years of experience in global mobility and international tax matters.  She leads Marriott...  |  Read More

Kennedy-C. Edward
C. Edward Kennedy, Jr., CPA, JD
Managing Director
C. Edward Kennedy Jr.

Mr. Kennedy has more than 36 years of experience dealing with a variety of international tax matters, specializing in...  |  Read More

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