TN 7 (10-16)
RS 02002.325 Scope of Agreement with Hungary
A. Policy for the United States
For the United States, the Totalization agreement applies to Social Security taxes related to the Retirement, Survivors and Disability Insurance (RSDI) program (Federal Insurance Contributions Act (FICA) taxes for employment and Self Employment Contributions Act (SECA) taxes for self-employment, including the Medicare portion). If an employee is exempt from U.S. Social Security coverage under this agreement, neither the employee nor employer has to pay his or her share of the FICA tax as long as the exemption is effective. A self-employed individual is also exempt from paying SECA taxes (equivalent to the employee and employer share of the FICA tax) for any period the exemption is effective.
B. Policy for Hungary
For Hungary, the agreement applies to taxes that finance retirement, survivors, and disability benefits under the Acts of LXXX of 1997, LXXXI of 1997, and CXCI of 2011. Consequently, if a worker is exempt from Hungarian coverage as a result of the agreement, no contributions are due under the Acts of LXXX of 1997, LXXXI of 1997, and CXCI of 2011.