After reading about Geitner's tax troubles, I have a question about working for a foreign company that don't pay SS taxes. My son works overseas for a foreign company. He is a US citizen but lives full time outside the country. He is paid in local currencies. Does he have an obligation to pay his own SS tax? Even if he does not have that obligation, can he pay into SS tax on his own?
Generally, a US citizen who is working overseas for a foreign employer as an employee and that employer is not a foreign affiliate of a US company that has entered into a voluntary agreement with the US, is not subject to US social security and medicare taxes. The employee would be subject to that country's equivalent system.
I used the word "generally" because the rules can be different if he is working in a country that has a bi-lateral totalization agreement (tax treaty) with the US that specifies something else.
Where is your son working?
It would also depend on whether is an actual employee of the foreign company or would/could be considered a contractor. That's what got Geitner in trouble in creating his liability for SE taxes.
Isn't that what I said in my post? ".. working overseas for a foreign employer as an employee.."
Self-employed taxpayers pay self-employment tax regardless of where they perform their services.
Mr. Geithner was an employee of the IMF. The IMF is an exempt organization. I.e., they are exempt from collecting and remiting employment taxes. As such the US employees are responsible for both halves of the social security & medicare taxes. The son working overseas for a foreign employer is a different set of oranges.
Alan wrote: ...
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Yes, I was just trying to emphasize to the OP the second case as to ensuring the correct status, not saying you said anything wrong.
Saying one is an employee isn't necessarily being one, just as some employers try to claim folks aren't when they may be. It was just a precaution intended to OP to be certain of actual status rather than assume/presume.
He is an actual employee.
China, no treaty.
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