Job Discussion Forums

Justateacher · Joined: 29 Aug 2005 Posts: 24

The wages that I earn here in China under USA tax law are considered Foreign Earned Income, I understand that.

But are these wages subject to (FICA) Social Security as well?

Thanks.

Zero · Joined: 08 Sep 2004 Posts: 1402

As I understand it, no. But freelancing income, like teaching students in your home, is.

Justateacher · Joined: 29 Aug 2005 Posts: 24

Zero,

Thanks. I agree with you on the income earned from tutoring.

You said that my wages are not subject to Social Security Tax. Can you tell me what you are basing your answer to my question on.

Thank you. I appreciate the time you are taking to reply.

Smile

Zero · Joined: 08 Sep 2004 Posts: 1402

I have researched it pretty thoroughly. The Social Security and IRS sites have information about it. Americans can run into a problem in retirement if they worked for many years overseas, because they either haven't earned enough credits to qualify for SS or they are only eligible for a very small check each month.

Here's a link:

http://www.irs.gov/businesses/small/international/article/0,,id=97160,00.html

Orrin · Joined: 02 Apr 2005 Posts: 206 Location: Zhuhai, China

Yes. Your "official" wages are subject to FICA.

Justateacher · Joined: 29 Aug 2005 Posts: 24

Orrin

What are official wages?

Aren't there tax treaties stipulation?

Did you have to FICA on your American wages?

Thanks

Jayray · Joined: 28 Feb 2009 Posts: 373 Location: Back East

What would one produce as proof of employment?

Orrin · Joined: 02 Apr 2005 Posts: 206 Location: Zhuhai, China

By "official" wages I mean those wages paid to you by the employer you are contracted to. Money you get from private students is not an issue. If you are not planning to apply for such US benefits such as Social Security Retirement, it's not an issue. But, if you have to work with the US State Department for, let's say, getting a visa for a Chinese spouse or applying for SSRB, you just might find yourself in a real "snake pit".

Zero · Joined: 08 Sep 2004 Posts: 1402

It is the opposite. Earnings from a Chinese employer are not subject to FICA. Earnings from self-employment are.

If you work for an American company in China, then those earnings are likely subject to FICA.

Lipps · Joined: 19 Jun 2009 Posts: 45

Tax treaty only says you are exempt from taxes for the first 90 days of your employment for the China side. The USA tax code is clear on this, and sucks. USA is one of only a small number of countries that taxes you on your earnings made abroad.

All wages earned abroad are subject to IRS scrutiny.
As far as Soc Sec. I wouldn't waste my time with it. There wont be anything left by the time you are ready to collect. Better to take that money and put it into a high interest bearing account and leave it untouched. Preferably a Chinese Yuan account, cause the dollar is sure to tank in the coming years due to inflation. F- Obama.

Santos L Halper · Joined: 11 Oct 2004 Posts: 37 Location: Left Below

http://www.irs.gov/businesses/small/international/article/0,,id=97160,00.html

I think Zero has it right. I don't think that working for a foreign organization outside of the US makes you responsible for paying social security taxes. I believe the responsibility comes if you are working abroad for a US company. I am always open to being corrected. But, any freelancing is subject to the self employment tax, which doubles up the social security tax and medicare tax.

tomstone · Joined: 09 Dec 2009 Posts: 293

Zero is exactly correct. Monies earned from a foreign entity are not taxable by the US, self-employment income over $400 per year (after deductions) is.