Social Security Agreement

A Social Security agreement is a bilateral agreement between the United States and another country that coordinates Social Security coverage, taxes, and benefits for cross-border workers. These agreements are often called totalization agreements, and they can affect whether a U.S. expat pays U.S. Social Security and Medicare tax, foreign social security tax, or only one country’s system for the same work.

Why it matters for U.S. expats

Social Security agreements can prevent double social security taxation when a U.S. expat works abroad or when a foreign worker works in the United States. They are especially important for self-employed expats, employees sent abroad by a U.S. employer, workers moving between agreement countries, and people who have split their careers between the United States and another country. The agreement does not replace income tax rules, but it can decide where Social Security or Medicare contributions are paid and whether foreign work credits can help qualify for future benefits.

Common questions

1. What is a Social Security agreement?

A Social Security agreement is an agreement between two countries that coordinates social security coverage and benefits for people who work across borders.

2. Is a Social Security agreement the same as a totalization agreement?

Yes. In U.S. tax and Social Security guidance, international Social Security agreements are commonly called totalization agreements.

3. What does a Social Security agreement do?

It helps prevent dual Social Security taxation and can allow work credits from both countries to be combined when determining eligibility for certain benefits.

4. Does a Social Security agreement cover income tax?

No. Social Security agreements cover social security coverage, contributions, and benefits. Income tax issues are handled under U.S. tax law, foreign tax law, and income tax treaties.

5. Can a Social Security agreement reduce self-employment tax?

Yes. If the agreement assigns coverage to the foreign country, a self-employed U.S. citizen or resident may be exempt from U.S. self-employment tax for the covered work.

6. Does the Foreign Earned Income Exclusion reduce Social Security tax?

No. The Foreign Earned Income Exclusion can reduce regular income tax, but it does not reduce U.S. Social Security, Medicare, or self-employment tax.

7. Does the Foreign Tax Credit reduce Social Security tax?

No. The Foreign Tax Credit applies to eligible foreign income taxes. It does not reduce U.S. Social Security tax, Medicare tax, or self-employment tax.

8. How does a Social Security agreement apply to employees sent abroad?

Many agreements include a detached-worker rule. An employee sent temporarily by an employer from one country to work in the other may remain covered only by the sending country’s system for the assignment period.

9. How does a Social Security agreement apply to self-employed expats?

The rules vary by agreement. Some assign coverage to the country where the self-employed person resides, while others allow temporary continuation under the home country’s system.

10. What is a certificate of coverage?

A certificate of coverage is official proof that a worker is covered by one country’s Social Security system under an agreement. It is used to show why contributions are not due to the other country’s system.

11. Who requests a certificate of coverage?

Employers usually request certificates for employees sent abroad. Self-employed workers usually request their own certificate from the country that covers them.

12. What if a self-employed expat is exempt from U.S. self-employment tax?

The taxpayer should attach a copy of the foreign certificate of coverage or SSA statement to the U.S. return each year they claim the exemption and follow the Schedule SE instructions for reporting the exemption.

13. Can a Social Security agreement help someone qualify for retirement benefits?

Yes. If a worker has some U.S. coverage but not enough to qualify for benefits, the United States may count coverage credits from an agreement country to help meet eligibility requirements. The benefit is partial and based on the worker’s U.S. coverage.

14. Does every country have a Social Security agreement with the United States?

No. The United States has agreements with specific countries only. If there is no agreement, U.S. and foreign social security rules both need to be reviewed.

15. Can workers choose which country’s Social Security system applies?

No. The agreement rules decide coverage. Workers and employers do not get to choose whichever system is cheaper or more convenient.

16. Do Social Security agreements cover Medicare tax?

Yes. The U.S. side of the agreement coordinates coverage and contributions under the U.S. Social Security and Medicare tax system, including self-employment tax where applicable.

17. Do foreign social security contributions count as Foreign Tax Credits?

Not automatically. Social security contributions are not the same as income taxes. Some country-specific exceptions or tax positions may apply, but the agreement and foreign tax type need to be reviewed.

18. What records should U.S. expats keep for Social Security agreements?

Keep employment contracts, assignment letters, self-employment records, certificates of coverage, foreign social security statements, U.S. Social Security earnings records, payroll documents, Schedule SE support, and copies of any correspondence with the SSA or foreign social security authority.

Related forms

• Schedule SE: Self-Employment Tax
• Schedule C: Profit or Loss From Business
• Form 1040: U.S. Individual Income Tax Return
• Form 1040-ES: Estimated Tax for Individuals
• Form 8959: Additional Medicare Tax
• Form 1116: Foreign Tax Credit

When to get help

Professional guidance is important when:

• You are self-employed abroad and pay foreign social security contributions.
• You work in a country that has a Social Security agreement with the United States.
• You were sent abroad by a U.S. employer.
• You work for a foreign employer but remain connected to a U.S. company.
• You need a certificate of coverage.
• You are unsure whether U.S. self-employment tax applies.
• You have worked in both the United States and another country and want to understand future benefit eligibility.
• You paid both U.S. and foreign social security tax on the same income.

Bright!Tax can review whether a Social Security agreement applies, identify which country has coverage rights, coordinate Schedule SE reporting, and help you avoid paying social security tax twice where relief is available. Get started with Bright!Tax.

Related Bright!Tax guides

• Totalization agreements for U.S. expats
• U.S.-Canada Totalization Agreement: What expats need to know
• Can Americans abroad earn U.S. Social Security credits?

Official sources

• SSA: U.S. International Social Security Agreements
• IRS: Totalization agreements
• IRS: Self-employment tax for businesses abroad
• SSA: Certificate of Coverage
• IRS: Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad

Reviewed by

Katelynn Minott, CPA & CEO

Last reviewed

July 2026