Retaining Social Security Benefits for Non Resident


W

W

A Peruvian citizen works in the US in the 1950s and 1960s, and then returns
home due to sickness and retires there. The Peruvian citizen does not have
US citizenship and does not have a current green card. The Peruvian
citizen does visit the US but does not have residency here. Does that
person have the right to their social security benefits, and if yes what is
required to file their status with social security so as to stay current
with US law about non residents who receive the social security benefit?
 
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R

rick++

The Peruvian
citizen does visit the US but does not have residency here. Does that
person have the right to their social security benefits, and if yes what is
required to file their status with social security so as to stay current
with US law about non residents who receive the social security benefit?
Citizenship doesnt matter in qualifying for a SS pension.
As long they paid in 40 quarters of taxes under a legal SS number.
Contact a SS office for one's payment history summary.

The difficulty is that SS does not send money abroad for non-citizens.
The client would have to have to established a US-based bank account
for check deposits.
This may not be too hard in this era of online banks.
 
A

Alan

The difficulty is that SS does not send money abroad for non-citizens.
The client would have to have to established a US-based bank account
for check deposits.
This may not be too hard in this era of online banks.
There is a list of countries that Social Security does send funds
to a foreign bank. Peru is on that list.
http://www.socialsecurity.gov/international/countrylist2.htm

You could try contacting the Embassy in Lima, but I doubt that
they can help you as it seems they do not have a foreign
operations office for this subject. Use the address below or
phone number to get more information. Also note, that as a
nonresident, 30% of your benefits (actually 30% x 85% of your
benefits) will be withheld for income taxes.

Social Security Administration
Office of International Operations
P.O. Box 17769
Baltimore, Maryland 21235-7769

You may also call SSA's Office of International Operations
directly at 410-965-5404, or send a fax to 410-965-6539. Calls
are answered only in English and during normal business hours for
the Eastern U.S.
 
R

removeps-groups

On 4/6/10 9:57 AM, rick++ wrote:
You could try contacting the Embassy in Lima, but I doubt that
they can help you as it seems they do not have a foreign
operations office for this subject. Use the address below or
phone number to get more information.  Also note, that as a
nonresident, 30% of your benefits (actually 30% x 85% of your
benefits) will be withheld for income taxes.
Isn't social security income US source income? If yes, then it should
be on page 1 of 1040-NR, usually taxed at lower rates, with a foreign
tax credit for tax on this income paid to Peru.

Is there a treaty between Peru and US? I didn't see one on
http://www.irs.gov/businesses/international/article/0,,id=96739,00.html
 
W

W

rick++ said:
Citizenship doesnt matter in qualifying for a SS pension.
As long they paid in 40 quarters of taxes under a legal SS number.
Contact a SS office for one's payment history summary.

That is what I thought, so part 2 of this saga is that the Peruvian citizen
received a letter from Social Security saying that they need to come in an
establish their residency within 15 days or they lose their benefit. That
struck me as a very short timeline and it also struck me as wrong that they
would threaten as the consequence of not being a resident the total loss of
benefit. Has anyone seen one of these notices before, and what is the
right response to this?

The difficulty is that SS does not send money abroad for non-citizens.
The client would have to have to established a US-based bank account
for check deposits.
This may not be too hard in this era of online banks.
She has a bank account in the US and also has relatives here, so the problem
is making sure to understand her legal rights and try to understand the
correct way to respond to Social Security.
 
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removeps-groups

Look at page 4 of the 1040NR. No income tax or soc. sec. treaty
with Peru.
OK, I see it in the instructions. If no treaty, then flat 30% tax on
85% of amount. And no foreign tax credit either?

Line 8—Social security benefits (and tier 1 railroad retirement
benefits treated as social security). 85% of the U.S. social
security and equivalent railroad retirement benefits you received are
taxable. This amount is treated as U.S. source income not effectively
connected with a U.S. trade or business. It is subject to the 30% tax
rate, unless exempt or taxed at a reduced rate under a U.S. tax
treaty. Social security benefits include any monthly benefit under
title II of the Social Security Act or the part of a tier 1 railroad
retirement benefit treated as a social security benefit. They do not
include any Supplemental Security Income (SSI) payments.
 

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