General Practice, Solo & Small Firm DivisionMagazine

$ocial $ecurity Benefits

U.S. citizens are eligible to receive Social Security benefits overseas, including payments for retirement, disability, and survivorship.

If a U.S. citizen is outside the United States for at least 30 days in a row, he or she is considered eligible. To make sure that the Social Security Administration is aware of your client’s overseas status, contact the nearest embassy or consulate. The embassy will send you a questionnaire to be completed by your client. Most importantly, report any work your client has undertaken, because the penalties for omission can be high.

Social Security benefits are threatened only if your client has worked during his or her stay overseas. To determine whether an overseas resident has worked and, if so, the amount of reduction, two tests are used. Under the Foreign Work Test, a given month’s benefits will be withheld, where a U.S. citizen is under 70 and has worked at least 45 hours in that month, the income of which has not been subject to the U.S. Social Security tax. The Annual Retirement Test applies if overseas earnings for the year surpass the annual exempt amount to which all U.S. taxpayers are subject. The result is a reduction in benefit. The reduction will generally be one-half or one-third, depending on the taxpayer’s age. The rules provide a safe harbor; no reductions under either test will apply if the taxpayer is at least 70 years old.

Some taxpayers have earned credits under two separate countries’ social security systems—but have attained full status in neither. "Totalization" agreements between the United States and numerous countries may help out.

For more information, call the Social Security Administration at 410/965-3548 or visit its website at

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