12 Social Security Agreements, Dependents and Family Abroad
Question for this chapter. When a household in the U.S. has relatives or money in countries like Mexico, China, India, Canada, the United Kingdom or Colombia, which of those countries have a social security agreement with the U.S., who gets to tax a cross-border benefit, and can a relative without an SSN support a credit?
Answer. Of the six countries, only Canada and the United Kingdom appear on the Social Security Administration's list of agreements; Mexico, China and India are simply absent from it, and the sources say nothing about Colombia. Which country may tax a cross-border social security benefit is decided by an income tax treaty, not by a social security agreement, and the rule differs by country. A relative with an ITIN can support only the smaller dependent credit and then only in some cases, while the larger child credit and the earned income credit call for an SSN valid for employment.
What to check
- Look the home country up on the SSA's current list of agreements, remembering that a missing entry is an inference, not a statement that no agreement exists.
- Check the income tax treaty for that country to see whether the paying country or the recipient's country of residence taxes the benefit.
- Check whether the saving clause keeps the treaty rule available to U.S. citizens and residents.
- For each relative, note which kind of identification number they hold and whether they are a resident alien or U.S. national.
- Keep in mind that sending or receiving money from family abroad can call for U.S. reporting even where no tax results, and that each home country has its own transfer rules.
What to confirm. Confirm the current status of any agreement or treaty with the SSA and IRS sources, since this chapter marks several home-country points, especially for Colombia, as not verifiable against official text.
One-line summary. A social security agreement and an income tax treaty answer different questions, and a family member's identification number decides which U.S. credits that person can support.
The full chapter is in the book. The web shows only each chapter's question, answer, checkpoints and one-line summary.