What Happens to My Social Security Payments? And some common myths about life after you renounce your US citizenship – Tax


Canada: What Happens to My Social Security Payments? »And some common myths about life after giving up your US citizenship

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One of the most frequently asked questions during my quitting webinars and the 4000 cases I have dealt with is: “Will I lose my Social Security after I renounce my US citizenship? “

The short answer is no. ‘ You will not lose your social security with a well-treated renunciationbecause most of the countries have totalization agreements with the United States to avoid such problems as far as the right is concerned.

If you have contributed to Social Security for 40 quarters (10 years), you can receive benefits when you are of age. Even if you do not have all of the 40 term credits, you may be able to combine your US work credits with work in your home country if there is an aggregation agreement with such provisions. For example, in Canada, there is a tabulation agreement that records the time worked north of the US border for those who meet a minimum time worked in the United States (much less than 40 quarters). Keep in mind that the payment amount, if you use the time worked in Canada to qualify, will only be used as a calculation based on the time worked in the United States. But something is always better than nothing!

If you are eligible to collect social security and your waiver process is well done, this will in no way affect the rights to payment or collection after expatriation. Your social security number will remain in place; you are simply no longer taxed as a US citizen. Keep the good one and get rid of bad cross border tax problems.

Here are some other common questions and myths we often come across about quitting:

After my waiver, do I have to file a US tax return on Social Security payments?

In general, no. While each country is a little different, the vast majority do not require a U.S. tax return filed after waiving a Social Security payment. In most cases, the United States will withhold a certain amount, and then you are free to do whatever you want with the rest. After the waiver, you are no longer taxed by the US government on your worldwide assets / income.

What Happens to My US Retirement Plans?

A person who has given up can still hold and receive payments from US-based retirement plans (for example) a 401 (k), IRAs, ROTHs, equity portfolios, etc.

Can I still benefit from health insurance?

Yes. If your waiver is done correctly.

After I renounce, does this remove US citizenship from my children?

No. Your waiver does not affect the citizenship status of your children or other family members born before your waiver.

Can I still own real estate in the United States after giving up?

Yes, you can continue to own, buy and sell real estate in the United States if your waiver is properly completed.

Will I have travel issues after I renounce my U.S. citizenship? Will I be distinguished when I travel to the United States?

No, you will not have travel problems if you give up correctly and you will avoid being banned from the United States for life under the Reed Amendment. Our firm has a flawless record of never having a client kicked out of the United States after giving up, as we will properly prepare you for the interview. So you can freely enter and leave the United States, and you will not be harassed by customs officials just because you have given up. For Canadians, there is no problem with Nexus Passes for repudiated citizens traveling with Canadian passports born in the United States. If you are gave up
correctly, you will be treated like any other Canadian citizen or fallback.

You will notice that a common caveat in our responses is
‘if your waiver is done correctly.’It is essential to forgo the right way to avoid an exit tax, inheritance tax, fees, penalties and a lifetime U.S. deregistration. Attending one of our webinars can put you on the right track to give up on the right track.

Moody’s Tax Law is just a question of tax. It is not a complementary service, it is our singular objective. Our Canadian and US lawyers and chartered accountants work together to develop effective tax strategies that deliver results, for individuals and corporate clients with interests in Canada, the United States, or both. Our strengths lie in cross-border tax advisory services in Canada and the United States, estate planning and tax litigation / dispute resolution. We identify areas of risk and opportunity, and create plans that strike the right balance of protection, optimization and compliance for each unique situation of our clients.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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