U.S. Totalization Agreements: What You Need to Know
The United States has entered into social security totalization agreements with over 30 countries around the world. These agreements are designed to eliminate dual social security taxation and provide benefits for workers who have split their careers between the United States and other countries.
What is a totalization agreement?
A totalization agreement is a bilateral agreement between two countries that coordinates the social security systems of the respective countries. The purpose of a totalization agreement is to ensure that individuals who work in more than one country do not pay social security taxes in both countries on the same income. Instead, they pay social security taxes in the country where they work, and their benefits are calculated based on their total earnings from both countries.
What are the benefits of a totalization agreement?
Totalization agreements provide several benefits for workers who split their careers between the United States and another country. First, they ensure that workers do not pay social security taxes in both countries on the same income, which can save them money. Second, they allow workers to qualify for social security benefits in both countries based on their total earnings, even if they do not meet the minimum requirements for benefits in one country. Finally, totalization agreements provide protection for workers` social security benefits in the event that they move between countries or change employers.
What countries have totalization agreements with the United States?
As of 2021, the United States has totalization agreements with the following countries:
– Australia
– Austria
– Belgium
– Brazil
– Canada
– Chile
– Czech Republic
– Denmark
– Finland
– France
– Germany
– Greece
– Hungary
– Ireland
– Italy
– Japan
– South Korea
– Latvia
– Lithuania
– Luxembourg
– Netherlands
– Norway
– Poland
– Portugal
– Slovak Republic
– Slovenia
– Spain
– Sweden
– Switzerland
– United Kingdom
It is important to note that each totalization agreement is unique and has its own specific rules and requirements. Workers who are covered under a totalization agreement should consult with their employers, social security agencies, or tax advisors for guidance on how to apply for benefits.
In conclusion, totalization agreements are an important part of the international social security landscape and can provide important benefits for workers who split their careers between the United States and another country. By coordinating social security systems and eliminating dual taxation, these agreements help to ensure that workers receive the benefits they have earned.
