TN 8 (04-19)

RS 02002.535 Coverage Rule For Self-Employment - U.S.-Icelandic Agreement

A. Resident Rule

A person whose earnings from self-employment would otherwise be subject to compulsory coverage in both the United States and Iceland is subject only to the laws of the country of which he or she is a resident.

B. Filing Obligation

A self-employed U.S. citizen, who is subject only to Icelandic social security taxes and contributions under the agreement and is exempt from paying Self-Employment Contributions Act (SECA) tax must still file a U.S. tax return every year. To show that the self-employment earnings are exempt from U.S. Social Security self-employment tax, the individual must do the following:

  • indicate on Schedule SE that the earnings are exempt under the agreement;

  • request a certificate of coverage from the Icelandic authorities; and

  • attach a photocopy of the Icelandic certificate of coverage to his or her U.S. tax return every year (see RS 02002.550) as proof of the exemption.

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To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0302002535
RS 02002.535 - Coverage Rule For Self-Employment - U.S.-Icelandic Agreement - 04/23/2019
Batch run: 04/23/2019
Rev:04/23/2019