Contributing to Social Security while in Canada
Moderator: Mark T Serbinski CA CPA
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stonemeadow
- Posts: 2
- Joined: Sat Nov 01, 2014 7:36 pm
- Location: Canada
Contributing to Social Security while in Canada
I have spent most of my work life in Canada except the last 7 years in the USA. Now I am back in Canada but must still file a US tax return since I am a dual Citizen. Since I need 10 years of SS payments to collect anything from SS when I retire, is it possible to pay some SS on my US Tax Return to qualify as a year of contribution? I realize there are pension treaties between Canada and the USA but with 3 more years of contribution, I can collect both CPP and SS. How to do it?
First off, let me asure you that you do NOT need to pay into SS for 40 quarters to collect SS.
By the totalization agreement, you would collect some SS with as little as 6 quarters, as long as you worked in canada for the remaining ones.
So, at retirement time, you apply to SSA, and inform them that while you are missing xx quarters in US, you have worked in canada for YY years, and they will calculate a monthly benefit for you.
What you WILL NOT get without 40 quarters of SS is Medicare benefits, so there may be some advantage to getting those 40 quarters, if you plan to eventually retire in US.
However, one cannot "elect" to pay SS contributions to make up those missing quarters, on income that is not either US wages or US self-employment income.
You would need to have US-based employment, you would need US wages of about $5000 to get 4 quarters per year. Alternatively, some self-employed individuals in canada have tried --with mixed success -- to pay self-employment tax (which is considred SS contributions) on their self-employment income, although technically they are exempt unless they have a US-based business. SSA reserves the right to deny benefits derived form periods when the worker was not supposed to be making contributions, legal or illegally.
By the totalization agreement, you would collect some SS with as little as 6 quarters, as long as you worked in canada for the remaining ones.
So, at retirement time, you apply to SSA, and inform them that while you are missing xx quarters in US, you have worked in canada for YY years, and they will calculate a monthly benefit for you.
What you WILL NOT get without 40 quarters of SS is Medicare benefits, so there may be some advantage to getting those 40 quarters, if you plan to eventually retire in US.
However, one cannot "elect" to pay SS contributions to make up those missing quarters, on income that is not either US wages or US self-employment income.
You would need to have US-based employment, you would need US wages of about $5000 to get 4 quarters per year. Alternatively, some self-employed individuals in canada have tried --with mixed success -- to pay self-employment tax (which is considred SS contributions) on their self-employment income, although technically they are exempt unless they have a US-based business. SSA reserves the right to deny benefits derived form periods when the worker was not supposed to be making contributions, legal or illegally.
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