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Tag Archive for totalization agreement

U.S. Citizens’ Foreign Tax Credits Against The 3.8% Obamacare Surtax

John Richardson

I wrote a post on August 7, 2016 which discussed the August 5, 2016 decision of the United States Court of Appeals – District of Columbia Circuits in the Esher case. In this case, Justice Millet ruled that:

That extreme reading of the Totalization Agreement rests on nothing more than the Commissioner’s own say-so. It lacks any grounding in the Agreement’s text or in any principle governing the interpretation of international agreements. The tax court’s corresponding disregard of the Totalization Agreement’s textual direction concerning the role of French law in resolving undefined terms and in determining the content of the laws enumerated in Article 2(1)(b) was error and requires reversal.

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The Interpretation of US Tax Treaties

John Richardson

Domestic Law, Foreign Law, or the Intent of the Treaty


On August 5, 2016 the United States Court of Appeals for the District of Columbia Circuits issued it’s decision in the Esher case.

This important case is: FRENCH TAXES US COURT REVERSAL 5 AUG 2016 (1)

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United States Social Security and Working Overseas

TaxConnections Picture - SSN and PassportUnited States Social Security and Medicare taxes continue to apply to wages for services performed as an employee working outside of the United States if you are working for an “American employer”. Similarly, if you are abroad and you are a self-employed US citizen or resident you generally are subject to the so-called “self-employment tax”. Self employment tax is a social security and Medicare tax on net earnings from self-employment. You can learn more about Self employment tax when working abroad from my blog post here on TaxConnections.

Many questions arise about US social security when one is working overseas. Some of these questions are: If you are working for an American employer, do you have to pay tax to both the US and the foreign host country’s social security systems? What happens if you are employed overseas but you are neither self-employed nor working for an American employer? If you do not have enough credits under the US social security system to qualify for benefits, does your work overseas “count” for purposes of US eligibility? If you already have enough credits under the US system to qualify for benefits, what happens with your foreign social security benefit credits — does the US count your foreign social security credits toward your US coverage?

Learn the answers in today’s blog posting.

Totalization Agreements

The US has negotiated international Social Security agreements, called “Totalization agreements,” with 24 countries. See the list here. Totalization agreements achieve two main goals: The first goal is to eliminate the possibility of Read more