In most cases in the United States, you must pay social security tax and Medicare Tax as an employee in the United States. Under the U.S. Security System, paying of these taxes contribute to your coverage.
For individuals that meet specific eligibility criteria, Social security coverage provides retirement benefits and medical insurance or Medicare benefits.
Your employer withholds these taxes from each wage payment. Even if you do not anticipate qualifying for social security or Medicare benefits, your employer must deduct these taxes.
Generally, in the United States, irrespective of the citizenship or residence of either the employee or the employer, U.S. social security and Medicare taxes apply to payments of wages for services performed.
In partial situations such as the services performed outside the United States, these taxes apply to wages. If social security and Medicare taxes apply to your wages, your employer should be able to inform you. If no taxes are due on behalf of you, you cannot make voluntary payments.
If social security or Medicare taxes were withheld in error from pay that is not subject to these taxes, contact the employer who withheld the taxes for a refund.
You can file a claim for refund, and claim for Refund and Request for Abatement with the Internal Revenue Service on Form 843 if you are unable to get a full refund of the amount from your employer.
Attach the following items to Form 843:
- INS Form I-94,
- If applicable INS Form I-538, Certification by Designated School Official, and
- If applicable, Form 8316,Information Regarding Request for Refund of Social Security Tax Erroneously Withheld on Wages Received by a Nonresident Alien on an F, J, or M Type Visa,
- A statement from your employer indicating the amount of the reimbursement your employer provided and the amount of the credit or refund your employer claimed or you authorized your employer to claim.
You must provide this information on your own statement and explain why you are not attaching a statement from your employer if you cannot obtain this statement from your employer,
- A copy of your Form W-2 to prove the amount of social security and Medicare taxes withheld,
- Showing the visa stamp a copy of the page from your passport.
Medicare taxes for self-employed individuals and self-employment tax is the social security. Nonresident aliens are not subject to self-employment tax. Resident aliens must pay self-employment tax under the same rules that apply to U.S. citizens.
However, a resident alien employed by an international organization, a foreign government, or a wholly owned instrumentality of a foreign government is not subject to the self-employment tax on income earned in the United States and outside the United States.
In order to coordinate social security coverage and taxation of workers employed for part or all of their working careers in one of the countries, the United States has entered into social security agreements with foreign countries. These agreements are usually referred to as totalization agreements.
Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. The agreements generally ensure that social security taxes (including self-employment tax) are paid only to one country.
Currently, any income above $90,000 isn’t subject to social security tax. This presents a problem for the nations poor and the federal government’s level of social security tax received.
As our population begins to age increasingly, there are fewer and fewer based employees to sustain the fueled growth and maintenance of the social security system.