Fica Agreement

A license defines the need to obtain recognition/certification and registration to perform a particular activity. If an agreement to total a given foreign contract with the resulting U.S. coverage is considered only (i.e. as a „separate worker”), the U.S. employer (or such an independent minister) should prospectively apply for a „coverage certificate” from the U.S. Social Security Administration. You can find an application online. In particular, information that a staff member has worked in the United States for six months or more prior to the date of their application should provide clear evidence of the „installation” required to approve the certificate. This certificate should reflect the fact that U.S. coverage (not foreign coverage) is tailored to both current wage tax obligations and future worker social security benefits, which may be important in the case of U.S. or foreign tax audits.

Only covered by a foreign country. If the worker is a foreigner who wishes to apply for exemption from U.S. Social Security and Medicare taxes on the basis of a totalization agreement, he must obtain a certificate of coverage from the social security authority of his country of origin and present such proof of insurance to his employer in the United States, in accordance with procedures 80-56, 84-54 and 92-9. An alternative procedure is provided in these revenue procedures for a foreigner who is unable to obtain a certificate of coverage from his country of origin. Under an agreement under Section 3121 (l), the U.S. employer undertakes to submit all necessary reports and transfer the FICA tax amounts of the employer and worker (i.e. Social Security) that would be due to U.S. citizens and residents of the foreign subsidiary. If an employer has more than one foreign subsidiary, an agreement under Section 3121 (l) should not apply to all. However, the agreement must apply to all U.S.

citizens and residents employed by a foreign subsidiary named in the agreement. An agreement under Section 3121 (l) is irrevocable for all foreign subsidiaries in the agreement. Conversely, the employer and worker of the American worker should ask the foreign country`s social security system for a similar clarification of the exclusive coverage of the foreign country if the contract abroad (except Italy) is carried out for more than five years. Again, such a certificate may be important in the case of an IRS application, particularly if the IRS asserts that the U.S. employer should have paid FICA taxes for several missing years. The creation of a right to an exemption under a totalization agreement can be obtained from a U.S. citizen or a resident alien or his employer through a claim for a report from the country where the worker is employed or from the country of residence. If you are a U.S. employer who sends an employee overseas to work for a foreign subsidiary of your company (not directly for you), the employee may qualify for a U.S. insurance certificate.

The worker can only be used if you have an agreement with the Internal Revenue Service pursuant to Section 3121 (l) of the Internal Income Code (IRC) to pay Social Security taxes for U.S. citizens and residents employed by the foreign subsidiary. (Click here to read IRC 3121 (l).) An employer enters into a Section 3121 (l) agreement by filing IRS Form 2032 with the Internal Revenue Service. Form 2032 contains additional information and instructions for reaching an agreement in accordance with Section 3121 (l).

Fica Agreement
Przewiń do góry