International Tax

Are U.S. citizens who move abroad subject to social security taxes (“FICA”) in the U.S.?

Generally, if a U.S. employer pays a U.S. citizen or resident alien working outside the U.S., the employer and the employee will be subject to U.S. FICA taxes. If the citizen works for a foreign subsidiary, the U.S. parent corporation may elect to pay all FICA taxes in which case the U.S. citizen will not have a FICA liability. The U.S. citizen who moves aboard is likely to be subject to the foreign country’s social security taxes. The U.S. however has social security totalization agreements with a number of countries to curb the double imposition of social security taxes if certain requirements are met. U.S. citizens or resident aliens working outside the U.S., employed by a foreign employer not affiliated with a U.S. corporation generally pay into the foreign country’s social security system.

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