Nonresident aliens contribute Social Security & Medicare Tax, but can't get any benefits later, fair?

Question

I am a Canadian citizen & resident, and have worked in US as a nonresident alien for a couple of months last year. The US employer deducted Social Security & Medicare Tax (about $2,000) from my payroll. I understand Social Security & Medicare Tax are like CPP in Canada, which I can get benefits after retire (if stay in Canada for more than 10 years).

If I don't go US later, I can't get any benefits from US after retire. Neither can I get refund my contribution according to the policy (http://www.irs.gov/publications/p519/ch08.html#d0e9552, only students can get refund). Is it fair?

Can anyone explain this?

terliuke: I am holding a TN visa, which is not included in nonimmigrant classification (“F,” “J,” “M,” or “Q”)

Answer 1

An agreement effective August 1, 1984, between the United States and Canada improves Social Security protection for people who work or have worked in both countries. It also helps protect the benefit rights of people who have earned Canadian Social Security credits based on residence and/or contributions in Canada.

Because the Canadian Social Security system includes a special pension plan operated in the Province of Quebec, an additional understanding has been concluded with Quebec to extend the agreement to that province—also effective August 1, 1984. Terms of the U.S.-Canadian agreement and U.S.-Quebec understanding are very similar, and except where otherwise noted, references in this document to the U.S.-Canadian agreement also apply to the U.S.-Quebec understanding.

The agreement with Canada helps many people who, without the agreement, would not be eligible for monthly retirement, disability or survivors benefits under the Social Security systems of one or both countries. It also helps people who would otherwise have to pay Social Security taxes to both countries on the same earnings.

http://www.ssa.gov/international/Agreement_Pamphlets/canada.html

Answer 2

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Answer 3

I did some research, and yes, you are right: you need to pay Social Security and Medicare taxes as any visa holder of H-1J-1, Q-1 or Q-2. I guess if you want to work in the United States based on those visas, when you have to pay taxes as any American. It can have a reasoning of discouraging companies from hiring non-immigrants and trying to avoid paying SS and Medicare taxes because you know that an employer has to match your payment and pay as much to IRS as well, right?

It could also be a reason that too many Canadians and Mexicans come here on TNs looking for jobs. So the government's answer is either to immigrate here or stay away. Lol J/K.

So sorry. If you want to work in the US, you have to pay an extra price.

Answer 4

If they came on a visa and overstayed, they can use an ITIN (You must have had legal status at one point to obtain a TIN.) Of course, they can file a return and ultimately end up getting anything paid in taxes back in a return. Some illegal immigrants use false or stolen SS# and are on payroll. These illegal immigrants do have taxes taken out of their check.. but usually use every deduction and end up paying very little. At least not enough to cover their use of public services. A lot of illegal immigrants are paid under the table and contribute nothing. The amount of tax that illegal immigrants pay on income is so little that their use of services exceed what they pay in. If I remember correctly they cause well over a $10 billion deficit on a federal level every year.

Answer 5

The U.S. has a totalization agreement with Canada which may make it possible for you to get some Social Security benefits from the U.S. if you work a bit longer there.. I am not sure about the specific terms of the agreement with Canada, but U.S. agreements with some countries, require only 18 months of work in the U.S. to qualify for retirement benefits - The idea is to protect workers (U.S. as well as foreign citizens) who have worked in the U.S. as well as in their own country.

It is worth your time to study the rules carefully - because normally, the Social Security Administration, does not keep track of a worker's earnings on a monthly basis. - U.S. residents who never work outside the country must have 40 quarters (10 years) of work credits to qualify for benefits. - But if a worker reports earnings of about $4,000 in a given year, the worker gets 4 quarters of credits regardless if the earnings were spread out over the entire year - or earned in a single month.

See:
http://www.ssa.gov/international/Agreement_Pamphlets/canada.htm

Answer 6

Social Security Disability Help : http://DisabilityHelp.siopu.com/?sOL

Answer 7

The U.S. figures it is their country and it is their rules, if you don't like it go home, you are not even a resident much less a citizen. Their are a lot of stupid rules in Canada as well.
Like if you work for a gov't in some form, you pay employment insurance premiums, but can never collect because, you can't claim, if you terminate your position, you can't claim if you were fired for cause, and you will never be laid off from a gov't job due to lack of work. IS THAT FAIR ??? I paid 35 years worth of premiums knowing it was just another form of tax to me.

Answer 8

Why don't you work in Canada? Would you expect a US citizen to work in Canada and be able to be rebated for something similar?
Sorry, this may sound brutal, but it is only fair that all people working in the US pay for those benefits. I have to, but I live in the US and will hopefully be able to get social security benefits when I retire (I am not counting on it though).

Answer 9

If you worked in the U.S. you were a resident alien not a non-resident alien. If you werer a non-reesident alien you would not come to the U.S. to work and you would not be subject to these taxes or to the income tax.

Answer 10

I certainly dont think it is fair at all. If you contribute you should be allowed to reap the benefits. It's one of the many, many things that I disagree with in the United States.