FICA Tax from the U.K.

I'm sure the answer is no, but would like to put this out for any ideas.

Although I have over 40 quarters, i'd like to somehow pay FICA so as to enable further Social Security qualifying years. I know you can't buy credits for Social Security, but is there any other way whilst in the U.K to obtain further quarters, (work for an American company that could pay via U.S. Payroll perhaps)?

Thanks

While the UK allows voluntary NI payments to increase your future pension amount, I don't think the US Social Security program has this option.  I would love to learn otherwise.  The IRS say "You cannot make voluntary social security payments if no taxes are due." (Link: https://www.irs.gov/individuals/international-taxpayers/social-security-tax-medicare-tax-and-self-employment)

Edit: I re-read your post and see that you do know the information I replied with.  Sorry.  But can you build up OAP here with voluntary NI contributions?  Or would WEP kick in and negate that?  (I have virtually no idea how these things work together, so I'm mostly just musing.)

If you are resident in the UK, no matter where the company is that you work for, you would pay tax in the UK, and still have to file a return in the US.  It really seems like more bother than it's worth, unless you can substantially improve your retirement income from the endeavor.*

* Edited to add: Admittedly, I am extremely lazy.

While the UK allows voluntary NI payments to increase your future pension amount, I don't think the US Social Security program has this option.  I would love to learn otherwise.  The IRS say "You cannot make voluntary social security payments if no taxes are due." (Link: https://www.irs.gov/individuals/international-taxpayers/social-security-tax-medicare-tax-and-self-employment)

Edit: I re-read your post and see that you do know the information I replied with.  Sorry.  But can you build up OAP here with voluntary NI contributions?  Or would WEP kick in and negate that?  (I have virtually no idea how these things work together, so I'm mostly just musing.)

If you are resident in the UK, no matter where the company is that you work for, you would pay tax in the UK, and still have to file a return in the US.  It really seems like more bother than it's worth, unless you can substantially improve your retirement income from the endeavor.*

* Edited to add: Admittedly, I am extremely lazy.

Thanks...

NI isn't an issue, as these can be bought and voluntary contributions have no negative WEP consequences, (if you only had a record of voluntary contributions/credits, then WEP would not come into it).

Still need to file a 1040 each year and then pay tax in both countries, although there would be FTC. Ultimately you'd be paying 'deductions' in both countries, but benefit from reduced or eliminated WEP (if I made it that far)!

The more I think about it, the more I feel that working for a U.S. company that had me on their Stateside payroll is the only option. Or U.S. Government (Foreign Service - U.K.)

I am in the situation where I live in the USA and still pay FICA because I receive a small non-qualified pension from my ex US employer that is reported on a W2. This does mean that I will have 30 years of FICA contributions by the time I am age 70 which is when I will start collecting SS. Apart from increasing the amount of SS I will receive it also means no WEP will applied. (My private UK pensions would otherwise implement WEP to the max)

I can confirm that OAP paid as a result of voluntary NI contributions does not count towards WEP. There is even an IRS form to report this and my wife will be putting this test very soon. The FBU in the US London Embassy have told her to submit this to them and they will check the details with DWP. e.g. if OAP pension is £100/week and 75% of her contributions are voluntary then only £25/week is counted in the WEP calculation

This is all very interesting.  Now I'm actually considering voluntary NI contributions, myself. It's a good idea IF I will live long enough... I will research tomorrow.

@durhamlad - I'm interested to know your rationale for deferring your SS until you are 70? I looked at this as an option myself but having made some assumptions and done the calculations it didn't seem to be financially worth it, unless I hit the age of about 95  - maybe it's different for you as you are not impacted by WEP (which I am).

@Barcrest - I had a similar challenge back in 2016 sitting there with 36 credits (where it had been since 1996!) and realising unless I got the extra 4 credits I wouldn't get anything from Uncle Sam. It's important to know that the term 'quarters' no longer applies  - it's now credits and your credits don't have to be earned over separate quarters - it's all earning related in one tax year

I then managed to resurrect some old contacts and got myself 4 weeks work in Santa Fe that took me over the threshold ($5,200 at the time) for 4 additional credits.  - so earn $5,880 in 2021 and you get 4 credits. You can read more here: https://www.ssa.gov/pubs/EN-05-10072.pdf. Even a working holiday might be enough to get those extra credits you yearn for!

@durhamlad - I'm interested to know your rationale for deferring your SS until you are 70? I looked at this as an option myself but having made some assumptions and done the calculations it didn't seem to be financially worth it, unless I hit the age of about 95  - maybe it's different for you as you are not impacted by WEP (which I am).

When to start SS is very much dependent on personal circumstances and I don't mind sharing ours.

Taking my SS at 70 for me is for a number of reasons but mostly as a type of insurance for my wife who is a year younger but much fitter and from a long-lived family. She only has 12 years of SS so has a much smaller benefit and has already applied for hers, plus it is subject to WEP.  At 70 my SS will be over $40k/year and at that point she will get a nice bump up in her SS benefit. I think that if both spouses take it at FRA and there is no WEP involved then the lower earning spouse gets bumped up to 50% of spouse so combined income is 1.5xSS. I really don't know how much increase she will get but it should be a nice booster.

Regardless of the above, when I die her SS will be increased to match mine which is my main reason for delay to 70.  (When 1 spouse dies the survivor gets the higher of the 2).

Since retiring early at age 55 and dropping down into a much lower tax bracket we both rolled our 401ks into IRAs and have been doing Roth conversions for the past 11 years.  Having a SS stream of income would have slowed down those conversions for us.  I completed my conversions 3 years ago and my wife will complete hers next year. My US and UK private pensions plus OAP and SS means that I will be in the 40% HMRC tax bracket well before forced distributions from the IRAs begin (RMDs), so converting to the Roth at a much lower tax rate is very much advantageous to us.

@durhamlad - thanks so much for sharing - that is very useful.

My circumstances are very different and I couldn't see any reason to defer so have started the process of taking mine now (I'm 66) - it's a nice little addition really but one I won't be totally reliant. Our main 'nest egg' is a SIPP which gives us great flexibility as to when we want to draw down and spend - always being aware of the tax bracket we're in.

Thanks again for sharing.

@durhamlad - I'm interested to know your rationale for deferring your SS until you are 70? I looked at this as an option myself but having made some assumptions and done the calculations it didn't seem to be financially worth it, unless I hit the age of about 95  - maybe it's different for you as you are not impacted by WEP (which I am).

@Barcrest - I had a similar challenge back in 2016 sitting there with 36 credits (where it had been since 1996!) and realising unless I got the extra 4 credits I wouldn't get anything from Uncle Sam. It's important to know that the term 'quarters' no longer applies  - it's now credits and your credits don't have to be earned over separate quarters - it's all earning related in one tax year

I then managed to resurrect some old contacts and got myself 4 weeks work in Santa Fe that took me over the threshold ($5,200 at the time) for 4 additional credits.  - so earn $5,880 in 2021 and you get 4 credits. You can read more here: https://www.ssa.gov/pubs/EN-05-10072.pdf. Even a working holiday might be enough to get those extra credits you yearn for!

I have 20 years of credits, but would love to somehow, someway continue to pay into the SS system to nail the WEP as low as possible... I'm sure many of us on this forum would like to do the same.... Scratching my head to see if there are any ways of getting these credits from the U.K...

You might want to look at the following:

https://www.irs.gov/individuals/international-taxpayers/social-security-tax-consequences-of-working-abroad

It seems that according to this IRS information (updated in November 2021) there may be ways of getting more credits - I guess it depends who you know and if you can get some form of employment.

Good luck, let us know how you get on. Sadly I have already hit ELY and with only 11 years of credits I will be WEP'd to max

You might want to look at the following:

https://www.irs.gov/individuals/international-taxpayers/social-security-tax-consequences-of-working-abroad

It seems that according to this IRS information (updated in November 2021) there may be ways of getting more credits - I guess it depends who you know and if you can get some form of employment.

Good luck, let us know how you get on. Sadly I have already hit ELY and with only 11 years of credits I will be WEP'd to max

Time to find a remote job -)

Either that or a job at the Embassy in London!