Foreign Earned Income and Social Security Taxation
Watch on YouTube American citizens working abroad often misunderstand their Social Security obligations. FICA liability depends on employer nationality, not work location - a U.S. employer abroad still runs FICA on your wages. The Foreign Earned Income Exclusion (up to ~$130,000 in 2026) eliminates income tax but does nothing for FICA. Totalization Agreements with 30+ countries prevent double Social Security taxation through the detached worker rule. Self-employed expats pay SECA at 15.3% unless a treaty reassigns coverage. Watch the next video in the Social Security playlist for capital gains and the SS tax squeeze.
▶ Watch next: Capital Gains and the Social Security Tax Torpedo Explained https://www.youtube.com/watch?v=xnaxwE_XQFs
📺 Full playlist: Social Security (US - 2026) https://www.youtube.com/playlist?list=PLlIAFxS296491LWfYsLp6anRyo6_DO_pI
Chapters
American citizens working abroad still pay Social Security if their employer is a U.S. company. Totalization Agreements with 30+ countries prevent double taxation for employees of foreign firms. Expats often misunderstand their FICA obligations — and the Foreign Earned Income Exclusion doesn't shield from SS.
Key Topics
- The "U.S. person" test for FICA liability
- Totalization Agreements (list of ~30 countries)
- Foreign Earned Income Exclusion: income tax only, not FICA
- Self-employed expats and SECA tax
- Short-term assignment rules (detached worker rules)
- Accumulating credits from foreign social security systems
- Claiming U.S. benefits while living abroad (which countries are restricted)