The U.S. Social Security (Totalization) Agreement: What You Need to Know
Social Security is a system designed to provide financial security for workers and their families during retirement, disability, or death. For U.S. citizens and residents abroad, the U.S. government has signed totalization agreements with several other countries to ensure that workers who have paid into both systems can receive benefits from both countries without being double-taxed.
What is the U.S. Social Security (Totalization) Agreement?
The U.S. Social Security (Totalization) Agreement, also known as the Totalization Agreement, is a bilateral agreement between the United States and other countries that coordinates the social security systems of the two countries.
Totalization agreements help individuals who have worked in both the U.S. and another country to avoid paying social security taxes to both countries and ensure that they receive the benefits they are entitled to from both systems.
The agreement eliminates dual social security coverage and dual taxation of social security benefits. It also provides for the coordination of social security benefit payments to eligible individuals who have lived or worked in both countries to ensure that they receive the benefits they are entitled to.
Which Countries have Totalization Agreements with the U.S.?
As of 2021, the United States has signed Totalization Agreements with 30 countries, including:
– Czech Republic
– Slovak Republic
– South Korea
– United Kingdom
How Does the Totalization Agreement Affect Your Social Security Benefits?
If you have worked in both the U.S. and another country that has a Totalization Agreement with the U.S., you may be eligible for social security benefits from both countries. The Totalization Agreement helps ensure that you do not pay social security taxes to both countries and that you receive the benefits you are entitled to from both systems.
To receive benefits from both countries, you must meet the eligibility criteria of each system. For example, to qualify for U.S. social security benefits, you must have earned enough credits by working and paying taxes into the U.S. social security system. To qualify for benefits from another country, you must have met that country`s requirements, which may differ from those of the U.S.
The Totalization Agreement also allows the Social Security Administration (SSA) to count your credits earned in the other country toward the eligibility of U.S. benefits. This means that if you have not earned enough credits to qualify for U.S. social security benefits, the credits you earned in the other country may be counted to help you qualify.
What Are Your Next Steps?
If you have worked or are planning to work in another country that has a Totalization Agreement with the U.S., it is important to familiarize yourself with the eligibility criteria of both systems and how the agreement affects your benefits.
The SSA offers resources and guidance for individuals who have worked or are working in another country that has a Totalization Agreement with the U.S. You can visit their website or contact them directly to learn more about your eligibility and how to apply for benefits.
In conclusion, the U.S. Social Security (Totalization) Agreement is designed to help individuals who have worked in both the U.S. and another country to avoid double taxation of social security benefits and ensure that they receive the benefits they are entitled to from both systems. Understanding your eligibility and the criteria of each system is essential to maximizing your benefits under the agreement.