# Social Security Certificate of Coverage



## blah2014

My family moved from US to UK in 2014. Before we moved, husband was self-employed and we paid US SS Tax. Immediately after the move, he started working for a UK company with no US presence and he paid NI. I have written to the SSA to ask, but thought I would ask here too in hopes of getting a quicker answer 

Do I need to request a SS Cert of Covg for his self-employment even though he didn't do any self-employed work after we moved?

Do I need to request his UK employer to request a SS Cert of Covg even though they don't have a US presence and he didn't work for them when he was in the US?

Thanks in advance!


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## BBCWatcher

Is somebody asking for the certificate of coverage?


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## Bevdeforges

Generally, there is no need for a certificate of coverage unless, as BBC mentions, someone asks for it. For tax filing purposes, he'll pay US SS tax (i.e. "self-employment" tax) on whatever earnings he had while still in the US, working for himself. The earnings from the UK will be eligible for exclusion under the FEIE if you choose to go that way - but you'll have to wait to file until you have been a full year outside the US. (See publication 54 for instructions on how that works. You generally file for extensions to take you to the point where you qualify for the FEIE.)
Cheers,
Bev


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## blah2014

No one is asking for the Cert. 

I just thought I was supposed to have it in hand already if they did ask for it. But I'm just not sure if they would only possibly ask when you were self employed on both sides of the pond or if you work for a company who moves you over and you continue to work for them but stop paying for SS and start paying for NI. Or, if they would possibly ask in our scenario? 

And, we are taking the credit instead of the exclusion so we don't have to file for any extensions to get bona fide residence. Since UK tax rates are higher, it's my understanding that it works out the same in the end. Right?

Thanks again


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## Bevdeforges

The chances of them asking for it are pretty much slim to none - especially if you report his earnings as salary.

It's up to you about taking the exclusion or the tax credit - however give a thought to the ACA question. To get the exemption for living abroad, you basically have to qualify for the physical presence or bona fide resident thing. (No telling how they'll do that this year, but that's what the instructions say.)
Cheers,
Bev


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## BBCWatcher

Bev, only "reason C" aligns with the same basic qualifications for taking the FEIE, but they're separate decisions. You can use reason C (if qualified) without taking the FEIE, or you can use another valid coverage answer and take the FEIE, or neither. You aren't required to take the FEIE if you use reason C. The healthcare coverage question is what it is. Very independently you can decide whether to take the FEIE or not.


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## blah2014

Thanks for the tip on the ACA. I hadn't gotten far enough on the 1040 form yet to see that question 
I wish they would offer better guidance on what to do during the "transition year". But, I will have to go do some more math and read some more instructions to figure out if extensions are necessary for us this year or not. Thank you.


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## DavidMcKeegan

If you are self employed and working in a country that has a totalization agreement in place, you should definitely request a certificate of coverage (in your case from the UK) and ideally include it with your US tax return. At the very least you should have it on hand for your records in case the IRS ever questions your SS contributions.

The certificate of coverage will ensure that you never have to pay SE tax twice on the same earnings.

More information on the certificate, and how to obtain it, can be found at International Programs - Totalization Agreement with the United Kingdom.

I hope this helps!


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## blah2014

Thank you, DavidMcKeegan. Yes, I do agree that if my husband was self-employed in the UK, I would definitely request the Social Security Cert of Coverage because the instructions clearly state that I should. But, because he was only self-employed before we moved to the UK and is now working for a company in the UK, I'm just not sure if I need to have the UK company request one or not. And, will I need to request every future employer of his for one as well? Or is it really just for if you are self-employed overseas or if you moved over and are working for the same company before and after the move and need to have the specific date when it switches from SS to NI documented.


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## DavidMcKeegan

Hello Blah2014,

I am sorry if my last post was confusing. I simply meant that if he begins to work as a self employed person _again_ in the UK he will have to obtain the certificate of coverage.

As long as he is employed in a traditional way (ie not self employed), he will not have to get the certificate of coverage.

For the SE income he earned while in the US, he would pay taxes as normal.


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## blah2014

Thank you!


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## Bevdeforges

BBCWatcher said:


> Bev, only "reason C" aligns with the same basic qualifications for taking the FEIE, but they're separate decisions. You can use reason C (if qualified) without taking the FEIE, or you can use another valid coverage answer and take the FEIE, or neither. You aren't required to take the FEIE if you use reason C. The healthcare coverage question is what it is. Very independently you can decide whether to take the FEIE or not.


I never said you had to take the FEIE, only that the qualification for the exemption (i.e. "reason C") is the same. It does beg the question as to whether or not you have to extend filing of your tax return until you have qualified for the physical presence test (like you have to do for claiming the FEIE). The bona fide resident test requires an entire calendar year outside the US and normally is tough to go for in your first (usually partial) year abroad.
Cheers,
Bev


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