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Reimbursement of Medicare and Social Security Payments

Reimbursement of Medicare and Social Security Payments

Old Jan 11th 2007, 10:25 pm
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Default Reimbursement of Medicare and Social Security Payments

All,

This may be urban legend but I was informed by a colleague that when one leaves the US permanently at (or before) the expiration of their H1-b, they are entitled to a refund of their medicare and SS payments (since they won't be collecting on them, having left the US).

I tried looking online for confirmation of this, but was only able to find information about SS refunds of deductions taken in error.

Does anyone here know if there is any truth to this?

Thanks,

Dan
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Old Jan 11th 2007, 10:43 pm
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Default Re: Reimbursement of Medicare and Social Security Payments

Originally Posted by dandc View Post
This may be urban legend but I was informed by a colleague that when one leaves the US permanently at (or before) the expiration of their H1-b, they are entitled to a refund of their medicare and SS payments (since they won't be collecting on them, having left the US).
I don't know about getting a refund, but yeah, if you didn't intend to stay, you didn't have to pay it...but it'll probably make things more of a hassle because then you'd have a higher income to be taxed and paid to the IRS....don't know if that'll balance things out.
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Old Jan 12th 2007, 2:51 am
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Default Re: Reimbursement of Medicare and Social Security Payments

Originally Posted by dandc View Post
All,

This may be urban legend but I was informed by a colleague that when one leaves the US permanently at (or before) the expiration of their H1-b, they are entitled to a refund of their medicare and SS payments (since they won't be collecting on them, having left the US).

I tried looking online for confirmation of this, but was only able to find information about SS refunds of deductions taken in error.
Urban legend. Only F-1, J-1 M-1 and Q visa status can get a refund.

Aliens Employed in the U.S. – Social Security Taxes:

http://www.irs.gov/businesses/small/...131635,00.html

F-visas, J-visas, M-visas, Q-visas. Nonresident alien students, scholars, professors, teachers, trainees, researchers, and other aliens temporarily present in the United States in F-1, J-1, M-1, or Q-1/Q-2 nonimmigrant status are exempt from Social Security / Medicare Taxes on wages paid to them for services performed within the United States as long as such services are allowed by the United States Citizenship and Immigration Services (USCIS) for these nonimmigrant statuses, and such services are performed to carry out the purposes for which they were admitted into the United States.

Publication 519 U.S. Tax Guide for Aliens:

http://www.irs.gov/pub/irs-pdf/p519.pdf

See chapter 8

All is not lost, since the U.S./U.K. Social Security agreement lets you apply your U.S. credits toward U.K. benefits and visa versa:

http://www.ssa.gov/international/Agr...phlets/uk.html

If you do not have enough work credits under the U.S. system to qualify for regular benefits, you may be able to qualify for a partial benefit from the United States based on both U.S. and U.K. credits. However, to be eligible to have your U.K. credits counted, you must have earned at least six credits (generally one and one-half years of work) under the U.S. system. If you already have enough credits under the U.S. system to qualify for a benefit, the U.S. cannot count your U.K. credits.

The United Kingdom provides benefits through a two-tier program:

1. The first tier, called the basic pension, is payable to workers who meet a minimum length of work requirement. Under the agreement, if you do not have enough credits under the U.K. system, your U.S. credits can be counted. To be eligible to have your U.S. and U.K. credits counted, you must have at least one year of coverage credited under the U.K. system.

2. The second tier is called the additional pension and is based on both the length of work under the U.K. system and the amount of earnings. A person can qualify for the additional pension with as little as one year of U.K. coverage. Therefore, credits under the U.S. system will not be considered when determining eligibility for the additional pension.

One last thing:

Understanding The Benefits:

http://www.ssa.gov/pubs/10024.html

The money you pay in taxes is not held in a personal account for you to use when you get benefits. Your taxes are being used right now to pay people who now are getting benefits. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.
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