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5 Essential Things Non-Citizens Need To Know About Social Security

Tax Planning Retirement Planning H1-B Green Card Financial Planning

6.5 MIN READ

What many non-citizens living and working in the United States don’t realize is that they are very likely eligible for Social Security benefits. In June 2018, the average Social Security benefit was $1,413 per month. While there are many factors that determine how much a person will get ranging from annual income to retirement age, these key benefits are often essential for many citizens and non-citizens alike. So if you are a noncitizen who isn’t sure whether you might be eligible for Social Security, how much you will receive and whether you’ll still be able to collect payments even if you return to your home country, then be sure to read this helpful guide.


1) You Don’t Have to Be a US Citizen to Receive Benefits

The vast majority of workers in the US have to pay 6.2% of their salary (their employers pay the other half) to Social Security. No matter how much money you make, this adds up quickly over time. Whether you are new to the workforce or at the tail end of a thirty-year career, you are going to want this money. The good news is that to receive benefits you only need to have been lawfully working in the country and meet certain requirements.

You don't even need to be a permanent resident to receive benefits, but may qualify under other provision including provisions under family unity and other statuses. The most important factor for most people is ensuring that he or she has accumulated 40 credits of work, or a little more than ten years. One credit is the equivalent to three months of work with a minimum of $1,360 earned in that period. However, you don’t have to even meet this alone and often your spouse or direct family member’s work credit may also count towards this amount. The first thing you should do is create a My Social Security Account. Here you can get an estimate of your future benefits based on your income, track what you have already earned, and more.

2) Even if You Don’t Have Enough Work Credits, You May Still Qualify

Even if you have no intention of working in the United States for anywhere near ten years and earning 40 work credits, you may still be eligible for benefits. As of the publication date of this blog, the US has bilateral agreements with 26 countries. The idea is to make it simpler for people working in other countries to qualify for benefits so you can combine your work credits in the US with those earned from one of those other 26 countries.

In addition, you will not have to pay out in both your home country and the US under this scheme, but only in the country where you are working. To qualify for Social Security in the US, you’ll need to have at least six work credits in the US accumulated before you retire.

3) You Can Collect the Benefits Even if You Do Not Live in the US

Aside from North Korea, Cuba and a few other countries where the US Treasury has issued payment restrictions, you’re free to live wherever you want and collect your payments. The usual rule is that for non-citizens, you have to live in the US for one full calendar month for every six months to keep receiving your benefits.

However, depending on the country you live in, there may be exceptions to this rule. For example, if you are Chinese citizen living in China, you can still receive your benefits provided you received at least 40 credits or lived in the US at least ten years. Check this Payment Abroad tool to see the specific regulations regarding the country you might be living in. Be sure to do this before moving abroad so you can plan accordingly.  

4) You’ll Probably Have to Pay Taxes on Your Social Security Benefits

Whether working or collecting benefits, the IRS is always going to want its share of your earnings. As with everything else, there is a wide variety of different deductions and exemptions, but on average, resident aliens in the US typically see a 25.5% reduction in their benefits. This is usually done through a withholding by the SSA.  

The good news is that you usually get a refund on these taxes when filing your US tax returns.  If the tax due is less the amount withheld then you will be able to get some or even all of the withholding back. For example, one great option for those who spend most of their time outside the US is to see if they qualify as nonresident which can completely eliminate the withholding. 

5) Foreign Benefits and Other Income May Also Reduce Your SSA Benefits

Many non-citizens are also eligible to receive retirement benefits from their home countries, but this may impact what you can draw from Social Security. The Windfall Elimination Provision can reduce your benefits to account for outside income. Check this simple screening tool to see whether or not you’ll be affected.

Before you apply for SSA, be sure you understand how any income from a pension to IRA withdrawals and part-time work might affect your benefits because it may either increase the IRS withholding or lead to other steps that result in you receiving reduced benefits.

Bonus Tip: Noncitizen Spouses Can Receive Spousal and Other Benefits

Foreign spouses married to US citizens generally are eligible to receive benefits. There are a few factors that determine it. If the noncitizen’s home country has an agreement with the US or if they have lived in the US for at least five years while married then he or she is eligible no matter what country the couple currently resides in. Likewise, even if the US citizen spouse passes away, the noncitizen should still be able to draw benefits.

Sorting through Eligibility for Social Security for Non-citizens

At the end of the day, despite the many complex rules and requirements of the SSA, most non-citizens who worked in the US should be eligible for receiving Social Security benefits. There are many factors that may determine the total you might be able to receive and how much might be withheld to satisfy the IRS, so be sure to look into some of the key points we mentioned here.

For more essential tips and information, be sure to check out our Insights page.

Navigating social security as a non-citizen and need support? MYRA Wealth can help. Schedule a free consultation.