>
Date: Wed, 19 Jun 2002 09:48:11 -0400
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Dear Stephen,
Stephen Wullschleger wrote:
> What they should have done was before they left Switzerland, apply to
> the Swiss government an election to continue to pay the Swiss social
> security while they work abroad (this is called the "Totalization
> Agreement"). The Swiss government would provide a certificate as a
> proof of approval. They can then give the U.S. employer this
> certificate and be exempt from U.S. social security & Medicare taxes.
The above statement is wrong. If you get a salary from a US employer, there
is now way to be exempt from paying U.S. social security & Medicare taxes. I
tried this when I started my job. Even with the help of my employer, for
whom that would have been beneficial (he would have been exempt from paying
his contribution to these taxes), US law has no provisions for exempting
anyone from these taxes, even if he does not plan to stay in the US and pays
them in a different country.
But there are treaties between Switzerland and the US, which make sure you
get compensated for what you paid to the social security in either country,
provided you contributed for a minimum amount of time in both countries. It
is important to note that the total time of contribution in both countries
is important, and not only the time you did contribute in the US (hence, no
need to contribute for 10 years in the US). I think, the best bet is to hope
that these agreements will not be denounced, pay US social security and
contribute to a 401K or an IRA.
Christoph
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Received on Wed Jun 19 2002 - 21:12:31 PDT
