Understanding the Social Security Tax System for Non-Citizens
If you are a non-citizen working in the United States, understanding the Social Security tax system is essential. The Social Security system provides benefits to eligible workers and their families, including retirement, disability, and survivor benefits. However, as a non-citizen, you may be subject to different tax rules and eligibility requirements than U.S. citizens.
In this article, we'll explore the basics of the Social Security tax system for non-citizens, including who is eligible for benefits and how taxes are calculated. We'll also cover some common questions non-citizens may have about paying and receiving Social Security benefits.
Who is Eligible for Social Security Benefits?
To be eligible for Social Security benefits, you must have earned enough "credits" by working and paying Social Security taxes. Generally, you need 40 credits (or 10 years of work) to qualify for retirement benefits. However, the number of credits required for disability and survivor benefits depends on your age and work history.
As a non-citizen, you may be eligible for Social Security benefits if you meet certain criteria. For example, if you are a lawful permanent resident (green card holder) and have worked and paid Social Security taxes for at least 10 years, you may be eligible for retirement, disability, or survivor benefits.
Additionally, if you are a non-citizen who has been lawfully present in the U.S. for at least 5 years and meets certain other requirements, you may be eligible for Supplemental Security Income (SSI) benefits. SSI provides financial assistance to people with low income and limited resources, including many older adults and people with disabilities.
How are Social Security Taxes Calculated?
Social Security taxes, also known as FICA taxes, are calculated as a percentage of your earnings up to a certain limit. In 2021, the Social Security tax rate is 6.2% for employees and employers, up to a maximum of $142,800 in earnings. This means that if you earn $50,000 a year, you would pay $3,100 in Social Security taxes and your employer would pay an additional $3,100.
For self-employed individuals, Social Security taxes are calculated differently. The self-employment tax rate is currently 12.4%, but self-employed individuals can deduct half of their Social Security tax on their tax return.
Non-citizens who work in the U.S. are subject to the same Social Security tax as U.S. citizens and lawful permanent residents. However, some non-citizens may be exempt from paying Social Security taxes if they are in the U.S. temporarily on certain types of visas, such as F-1 student visas or J-1 exchange visitor visas.
Can Non-Citizens Get Refunds for Social Security Taxes?
Non-citizens who work in the U.S. and pay Social Security taxes may be eligible to receive a refund of their taxes if they leave the U.S. before they are eligible for Social Security benefits. To qualify for a refund, you must have worked and paid Social Security taxes for less than 10 years.
To apply for a refund, non-citizens need to file Form 843, Claim for Refund and Request for Abatement, with the Social Security Administration. Refunds are not automatic – you must apply for them.
What Happens to Social Security Benefits When Non-Citizens Leave the U.S.?
If you are a non-citizen who has earned Social Security benefits and then leaves the U.S., your benefits may continue to be paid to you even if you are living outside the U.S. However, there are some restrictions on receiving benefits abroad.
For example, if you are a non-citizen who has never lived in the U.S. and earned Social Security benefits based on work you did while in the U.S., you may need to live in the U.S. for a certain amount of time before your benefits can be paid to you abroad.
Additionally, some countries have agreements with the U.S. that allow for coordination of Social Security benefits between the two countries. These agreements can affect the amount of benefits you receive and the eligibility requirements.
Final Thoughts
Understanding the Social Security tax system as a non-citizen can be complex, but it's important to ensure you are complying with U.S. tax laws and are aware of your eligibility for benefits. If you have questions about your situation, it may be helpful to consult with a tax professional or immigration attorney.
Remember, paying Social Security taxes as a non-citizen may not only help you qualify for benefits in the future, but it also supports the overall Social Security system. By contributing to Social Security taxes, you are helping ensure that the system continues to provide benefits to eligible workers and their families for years to come.