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Social Security and Medicare Taxes: Taxes for Americans Abroad (2025 IRS Guide)

This guide covers “Social Security and Medicare Taxes” within taxes for americans abroad. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 54 (12/2025), Tax Guide for U.S. Citizens and Resident Aliens Abroad, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

  • Withholding income tax from the pay of U.S. citizens,

  • Withholding tax at a flat rate, and

  • Social security and Medicare taxes.

Publication

  • 505 Tax Withholding and Estimated Tax

Form (and Instructions)

  • 673 Statement for Claiming Exemption From Withholding on Foreign Earned Income Eligible for the Exclusion Provided by Section 911

  • W-4 Employee's Withholding Allowance Certificate

  • W-9 Request for Taxpayer Identification Number and Certification

See chapter 7 for information about getting this publication and these forms.

Social Security and Medicare Taxes

Social security and Medicare taxes may apply to wages paid to an employee regardless of where the services are performed.

General Information

In general, U.S. social security and Medicare taxes do not apply to wages for services you perform as an employee outside the United States unless one of the following exceptions applies.

  1. You perform the services on or in connection with an American vessel or aircraft (defined later) and either:

    1. You entered into your employment contract within the United States, or

    2. The vessel or aircraft touches at a U.S. port while you are employed on it.

  2. The service is designated as employment for U.S. social security and Medicare tax purposes under Bilateral Social Security (Totalization) Agreements (discussed later).

  3. You are working for an American employer (defined later).

  4. You are working for a Foreign affiliate (defined later) of an American employer under a voluntary agreement entered into between the American employer and the U.S. Department of the Treasury.

American vessel or aircraft.

An American vessel is any vessel documented or numbered under the laws of the United States and any other vessel whose crew is employed solely by one or more U.S. citizens, residents, or corporations. An American aircraft is an aircraft registered under the laws of the United States.

American employer.

An American employer includes any of the following.

  • The U.S. Government or any of its instrumentalities.

  • An individual who is a resident of the United States.

  • A partnership of which at least two-thirds of the partners are U.S. residents.

  • A trust of which all the trustees are U.S. residents.

  • A corporation organized under the laws of the United States, any U.S. state, or the District of Columbia, Puerto Rico, the USVI, Guam, or American Samoa.

An American employer also includes any foreign person with an employee who is performing services in connection with a contract between the U.S. Government (or any instrumentality thereof) and a member of a domestically controlled group of entities which includes such foreign person.

Foreign affiliate.

A foreign affiliate of an American employer is any foreign entity in which the American employer has at least a 10% interest, directly or through one or more entities. For a corporation, the 10% interest must be in its voting stock. For any other entity, the 10% interest must be in its profits.

Form 2032, Contract Coverage Under Title II of the Social Security Act, available at IRS.gov/Form2032, is used by American employers to extend social security coverage to U.S. citizens and resident aliens working abroad for foreign affiliates of American employers. Once you enter into an agreement, coverage cannot be terminated.

Excludable meals and lodging.

Social security tax doesn’t apply to the value of meals and lodging provided to you for the convenience of your employer if it is reasonable to believe that you will be able to exclude the value from your income.

Bilateral Social Security (Totalization) Agreements

The United States has entered into agreements with some foreign countries to coordinate social security coverage and taxation of workers who are employed in those countries. These agreements are commonly referred to as “totalization agreements.” Under these agreements, dual coverage and dual contributions (taxes) for the same work are eliminated. The agreements generally make sure that you pay social security taxes to only one country.

Generally, under these agreements, you will only be subject to social security taxes in the country where you are working. However, if you are temporarily sent to work in a foreign country and your pay would otherwise be subject to social security taxes in both the United States and that country, you can generally remain covered only by U.S. social security.

For more information on specific agreements, go to SSA.gov/International/Agreement_Descriptions.html and IRS.gov/TotalizationAgreements.

Covered by United States only.

If your pay in a foreign country is subject only to U.S. social security tax and is exempt from foreign social security tax, your employer should get a certificate of coverage from the SSA’s Office of Earnings and International Operations. Employers can request a certificate of coverage online at SSA.gov/international/CoC_link.html.

Covered by foreign country only.

If you are permanently working in a foreign country with which the United States has a social security agreement and, under the agreement, your pay is exempt from U.S. social security tax, you or your employer should get a statement from the authorized official or agency of the foreign country verifying that your pay is subject to social security coverage in that country.

If the authorities of the foreign country will not issue such a statement, either you or your employer should get a statement from the U.S. SSA’s Office of Earnings and International Operations at the website listed earlier. The statement should indicate that your wages aren’t covered by the U.S. social security system.

This statement should be kept by your employer because it establishes that your pay is exempt from U.S. social security tax.

Only wages paid on or after the effective date of the totalization agreement can be exempt from U.S. social security tax.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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