On Tuesday, May 9, 2023 at 12:41:49 PM UTC-4, Tavis Ormandy wrote:
I had a random question about the foreign tax credit.
I'm a brit living in the US, so I have the option (not obligation)
to make UK National Insurance contributions. The reason you would do
this is so that you accrue the equivalent of Social Security work
credits while abroad.
I assumed this wouldn't qualify for the foreign tax credit, because a)
it's not a "compulsory payment", and b) there's a totalization agreement between UK and US.
However... I'm told the IRS does allow French citizens to deduct their equivalent - CSG.
Is that true, and if so how come?
Tavis.My guess is that the foreign tax credit is a credit for INCOME tax and contributions you are referring to is not an income tax -- compulsory or not. In USA, we don't get to a tax credit or deductions for our Social Security ("SS") contributions.
I think in some treaties, if you contribute to your own country's equivalent of our SS, you may be exempt from making the Social Security contributions on US Earnings. If that is the case, you also would not be entitled to SS benefits in your old age.
On Tuesday, May 9, 2023 at 4:38:23 PM UTC-7, Not A Clue wrote:
On Tuesday, May 9, 2023 at 12:41:49 PM UTC-4, Tavis Ormandy wrote:
I had a random question about the foreign tax credit.My guess is that the foreign tax credit is a credit for INCOME tax and contributions you are referring to is not an income tax -- compulsory or not. In USA, we don't get to a tax credit or deductions for our Social Security ("SS") contributions.
I'm a brit living in the US, so I have the option (not obligation)
to make UK National Insurance contributions. The reason you would do
this is so that you accrue the equivalent of Social Security work
credits while abroad.
I assumed this wouldn't qualify for the foreign tax credit, because a)
it's not a "compulsory payment", and b) there's a totalization agreement >>> between UK and US.
However... I'm told the IRS does allow French citizens to deduct their
equivalent - CSG.
Is that true, and if so how come?
Tavis.
I think in some treaties, if you contribute to your own country's equivalent of our SS, you may be exempt from making the Social Security contributions on US Earnings. If that is the case, you also would not be entitled to SS benefits in your old age.
Here is a comparable situation with a different tax - California SDI. Some employees are subject to it, and some others are not. Those that are not may opt in and pay it if they want to be covered by the benefit of it. For those that are under themandate to pay it, it is a tax deductible on Schedule A. For those that did not fall under the mandate but opted in, even though they pay the same tax in the same amount that they'd've paid had they fell under the mandate, there is NO deduction,
Maria U. Ku, CPA
On 5/11/2023 11:35 AM, Maria Ku wrote:mandate to pay it, it is a tax deductible on Schedule A. For those that did not fall under the mandate but opted in, even though they pay the same tax in the same amount that they'd've paid had they fell under the mandate, there is NO deduction,
Here is a comparable situation with a different tax - California SDI. Some employees are subject to it, and some others are not. Those that are not may opt in and pay it if they want to be covered by the benefit of it. For those that are under the
Maria U. Ku, CPA
On Thursday, May 11, 2023 at 3:50:05 PM UTC-7, Taxed and Spent wrote:mandate to pay it, it is a tax deductible on Schedule A. For those that did not fall under the mandate but opted in, even though they pay the same tax in the same amount that they'd've paid had they fell under the mandate, there is NO deduction,
On 5/11/2023 11:35 AM, Maria Ku wrote:
Here is a comparable situation with a different tax - California SDI. Some employees are subject to it, and some others are not. Those that are not may opt in and pay it if they want to be covered by the benefit of it. For those that are under the
Insurance (VPDI). A VPDI can be offered by the employer in lieu of CASDI or the employees can vote for a VPDI. VPDI contributions are not tax deductible. The only individuals that I am aware of who can opt-in are the self-employed or business owners (notMaria U. Ku, CPA
I'm not sure that this statement regarding employees not being covered by CASDI and opting in is correct. It is my understanding that all employees in CA must make mandatory contributions unless they are covered by a Voluntary Plan for Disability
On Friday, May 12, 2023 at 7:27:58 PM UTC-7, Alan wrote:the mandate to pay it, it is a tax deductible on Schedule A. For those that did not fall under the mandate but opted in, even though they pay the same tax in the same amount that they'd've paid had they fell under the mandate, there is NO deduction,
On Thursday, May 11, 2023 at 3:50:05 PM UTC-7, Taxed and Spent wrote:
On 5/11/2023 11:35 AM, Maria Ku wrote:
Here is a comparable situation with a different tax - California SDI. Some employees are subject to it, and some others are not. Those that are not may opt in and pay it if they want to be covered by the benefit of it. For those that are under
Insurance (VPDI). A VPDI can be offered by the employer in lieu of CASDI or the employees can vote for a VPDI. VPDI contributions are not tax deductible. The only individuals that I am aware of who can opt-in are the self-employed or business owners (notMaria U. Ku, CPA
I'm not sure that this statement regarding employees not being covered by CASDI and opting in is correct. It is my understanding that all employees in CA must make mandatory contributions unless they are covered by a Voluntary Plan for Disability
Alan,to Social Security) tax.
Your statement "all employees in CA must make mandatory contributions unless they are covered by a Voluntary Plan for Disability Insurance (VPDI)" is incorrect. For example, as a community college faculty in California, I am not subject to SDI (neither
Maria U. Ku, CPAYes, I accidentally dropped the part that said "that were not exempt under the Insurance Code." See the following for those who are exempt.
--
| Sysop: | Keyop |
|---|---|
| Location: | Huddersfield, West Yorkshire, UK |
| Users: | 300 |
| Nodes: | 16 (2 / 14) |
| Uptime: | 37:26:48 |
| Calls: | 6,707 |
| Files: | 12,241 |
| Messages: | 5,353,507 |