TN 1 (09-05)
RS 02002.055 Scope of Agreement with Japan
A. Policy – United States
For the United States, the agreement applies to Social Security taxes related to the retirement, survivors, disability and health insurance (RSDHI) programs (i.e., FICA taxes for employment and SECA taxes for self-employment, including the Medicare portion). Thus, if a person is exempt from U.S. Social Security coverage under this agreement, neither the employee and employer share of the FICA tax nor the SECA tax, in the case of a self-employed person, has to be paid with respect to that person for any period during which the exemption is effective.
B. Policy – Japan
For Japan, the agreement applies to taxes that finance retirement, survivors and disability benefits and, in some case, taxes for the Japanese health insurance program. Consequently, if a worker is exempt from Japanese coverage as a result of the agreement, no contributions are due for these programs.