Can You Continue Receiving and How Are You Taxed on U.S. Social Security Benefits Abroad?

For many non-U.S. citizens who worked in the United States and earned Social Security credits, one of the most important retirement questions is: “If I move abroad and give up my U.S. immigration status, will I still receive my Social Security benefits—and how will they be taxed?”

The answer is not simple. It depends on a web of U.S. domestic rules, international treaties, and the laws of the country where you plan to retire. Below, we outline a decision-tree framework that shows how to approach these questions in a systematic way.

Step 1: Did You Earn Enough Credits?

To qualify for U.S. Social Security retirement benefits, you need to have earned enough “credits” through covered employment. In most cases, this means 40 credits, or about 10 years of work in the U.S. Without these credits, benefits aren’t payable—no matter where you live.

Step 2: Where Are You Living?

Once you leave the U.S., the rules change. Social Security divides the world into three broad categories:

1. U.S. and Territories (Puerto Rico, Guam, U.S. Virgin Islands, American Samoa, Northern Mariana Islands): benefits continue without interruption.

2. Countries with Agreements or Exceptions: If your country of residence has a Social Security totalization agreement with the U.S. (such as Canada, Japan, Italy, or Germany), or is on the list of “payment agreement countries,” benefits continue to flow even after you’ve lived abroad for more than six months. Examples of the countries on the payment agreement countries are most of Western Europe, Israel, Japan, South Korea, Australia, Chile, Czech, Poland, Hungary and others. 

3. Restricted Countries: Certain places (currently Cuba and North Korea) cannot receive U.S. Treasury payments. If you live there, your benefits are suspended but can be resumed if you move elsewhere.

If you are not a U.S. citizen, the “alien nonpayment rule” generally stops your checks after six months abroad, unless one of the treaty-based or statutory exceptions applies.

Step 3: How Does U.S. Tax Law Treat Your Benefits?

Assume you are a nonresident alien for U.S. tax purposes after leaving. The default rule under the Internal Revenue Code is straightforward:

• The U.S. taxes 85% of your Social Security benefits at a flat 30% rate.

• This produces an effective withholding rate of 25.5% on your gross benefits.

• Payments are made net of withholding, unless you can reduce this through a tax treaty.

Step 4: Do You Live in a Treaty Country?

This is where the decision tree splits in two directions:

• Treaties Giving the U.S. Exclusive Rights: Some treaties (such as with the United Kingdom and the Netherlands) say that only the U.S. can tax your Social Security. In these cases, the 25.5% U.S. withholding generally applies, and your new home country should not impose additional tax. 

• Treaties Giving the Residence Country Exclusive Rights: Other treaties (such as with Japan, Portugal, Germany, and Ireland) shift taxation to your country of residence. In these cases, the U.S. should not tax your benefits. You may (only may) need to file paperwork (Form W-8BEN or a 1040-NR) to stop U.S. withholding, and then you are taxed only under your local system. For Japan, SSA’s internal POMS (Program Operations Manual System) explicitly lists Japan as a treaty country where U.S. tax does not apply.

• No Treaty: If you live in a country without a treaty, the default 25.5% U.S. withholding applies, and your local country may also tax you—creating the potential for double taxation.

Step 5: How Does Your Country Tax Social Security?

Finally, your local tax system matters. Some examples:

• Italy (Southern regions): Under the special 7% flat tax regime for new residents, foreign Social Security can be taxed at a low flat rate.

• Japan: Japan's National Tax Authority taxes US social security benefits with 10% to 45% progressive rates and 10% local inhabitant tax. 

• Canada: Social Security is partially exempt under the U.S.–Canada treaty, with a portion taxed in Canada instead.

• No Treaty Countries: You may face full U.S. withholding plus local tax, unless domestic exemptions apply.

Practical Next Steps

If you are a non-U.S. citizen who earned Social Security benefits and are planning a move abroad, here is a practical checklist:

1. Confirm your eligibility (do you have the required credits?).

2. Check your destination country’s status (treaty country, agreement country, or restricted).

3. Understand your tax exposure (U.S. withholding vs. treaty relief).

4. Review your local tax system (is foreign Social Security exempt, partially taxed, or fully taxed?).

5. File the right paperwork (1040-NR if claiming a refund if you are over-withheld).

Final Thoughts

U.S. Social Security benefits can follow you across borders, but the taxation depends heavily on where you go. Some retirees may enjoy continued payments with limited taxation, while others could see their benefits reduced by U.S. withholding and foreign tax combined. A country-by-country analysis is essential before making relocation decisions.

Disclaimer

This article is for general informational purposes only and is not intended as legal, tax, or financial advice. Rules and treaty provisions are complex and subject to change. You should consult with a qualified tax advisor or attorney before making decisions regarding your Social Security benefits and cross-border tax planning.