2 An exception to this rule is the agreement with Italy, which allows some transferred workers to choose the social security system to which they are subject. No other U.S. totalization agreement contains a similar rule. Please note that the Federal Benefits Unit does not collect tax on ASS. For more information on the tax side of the agreement, visit your IRS representative or the SSA International Programs website. The general principle of all totalisation agreements is that a worker, if equal, must pay taxes and should only be covered by the social security system of the country in which he works. This simple rule is called the territorial rule, that is, the territory in which a person works determines his or her tax debt. All other coverage provisions for totalization agreements are exceptions to this general rule. You can also write to this address if you want to propose negotiating new agreements with certain countries. In developing its negotiating plans, the SSA attaches considerable importance to the interests of workers and employers who will be affected by potential agreements.
The provisions to eliminate dual coverage for workers are similar in all U.S. agreements. Each of them establishes a basic rule regarding the location of the employment of a workforce. Under this basic “territorial rule,” a worker who would otherwise be covered by both the United States and a foreign regime is subject exclusively to the coverage laws of the country in which he or she works. For example, if you have earned at least six Social Security credits in the United States but are not eligible, we can count your credits in a contracting country to make up the difference. If you meet the minimum licensing requirements on the basis of combined credits from both countries, you have a partial benefit in the United States, which is proportional to the number of credits you have purchased in the United States. The other county can also use your U.S. funds to help you meet the conditions for a foreign pension. Although totalization agreements vary according to the partner country`s social security system, Table A-1 summarizes some common coverage situations for U.S. workers posted abroad to work.
As a general rule, a worker is covered by the social security system of the country in which he works. However, totalization agreements indicate exceptions for certain categories of U.S. workers. Since totalization agreements are inherently reciprocal, these waivers apply equally to foreign workers in the United States. Without social security coordination, people who work outside their home countries can be covered by the regimes of two countries for the same work. In this case, both countries generally require employers and salaried workers or self-employed workers to pay social security taxes. The agreements allow sSA to add U.S. and foreign coverage credits only if the worker has at least six-quarters of U.S.
coverage. Similarly, a person may need a minimum amount of coverage under the foreign system to have U.S. coverage accounted for in order to meet the conditions for granting foreign benefits. To date, the United States has entered into totalization agreements with 28 countries; Three other agreements have been signed, but they are not yet in force. A list of all totalization agreements is listed in Appendix C. This problem is particularly acute for U.S. workers, as the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA) require broader coverage for the United States.