TN 17 (06-97)
RS 02001.105 Scope of the U.S. - German Agreement
A. POLICY - UNITED STATES
For the United States, the agreement applies to Social Security taxes under the RSDHI program (i.e., FICA taxes for employment and SECA taxes for self-employment, including the Medicare portion). Thus, if an individual is exempt from U.S. Social Security coverage under this agreement, neither the employee or employer share of the FICA tax nor the SECA tax, in the case of a self-employed person, has to be paid.
B. POLICY - GERMANY
1. Before May 1, 1996
Prior to May 1, 1996, the agreement applied to German Social Security taxes that financed retirement, survivors and disability benefits. Workers exempted from German coverage by the agreement before that date were not required to pay contributions to these three programs.
2. Beginning May 1, 1996
The supplementary agreement that took effect on May 1, 1996, expanded the scope of the agreement to include German Social Security taxes that finance sickness insurance and long-term nursing care benefits, as well as retirement, survivors and disability benefits. As a result, beginning May 1, 1996, workers exempt from German coverage under the agreement are not required to pay contributions to any of these five programs.