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Social Security Agreement betwwen United States and Czech Republic

The Social Security Administration announces an agreement with the Czech Republic effective January 1, 2009, that removes from Americans working in the Czech Republic the burden of paying social security taxes to both countries.

The agreement also removes the double taxation requirement for Czechs working in the United States, and it improves social security protection for people who work in both countries.  It helps many people who, without the agreement, would not be eligible for benefits under the social security system of one or both countries.  

Until now, U.S. companies that employed U.S. citizens in the Czech Republic were required to pay Social Security taxes to both the U.S. and the Czech Republic on the same earnings, as well as contributions for U.S. Medicare, and Czech unemployment insurance.  Czech employers with Czech personnel in the United States also had to pay duplicate contributions.  The combined U.S. and Czech contributions payable by an employer and employee were nearly 50 percent of a worker’s salary.  However, under the agreement, U.S. and Czech employers and their employees will now contribute to either the U.S. Social Security and Medicare system, or to the Czech social security and unemployment systems, but not both.

The agreement, which is administered in the United States by the Social Security Administration, also helps fill gaps in social security benefit protection for people who have spent time working in both countries.  Some workers who have divided their careers between the United States and the Czech Republic fail to qualify for social security benefits from one or both countries because they do not meet minimum eligibility requirements.  Under the agreement it will be possible for workers and their family members to qualify for partial U.S. or Czech benefits based on combined credits from both countries.  Approximately 800 U.S. and Czech workers will get immediate tax relief, while an estimated 5,300 people may qualify for U.S. and Czech benefits once the agreement has been in force for 5 years.

Richard W. Graber, the U.S. Ambassador to the Czech Republic, and the Deputy Prime Minister and Minister of Labour and Social Affairs of the Czech Republic, Petr Necas signed the accord in Prague, Czech Republic, on September 7, 2007.  The United States has similar social security agreements in effect with 22 other countries, including Australia, Canada, Chile, South Korea, Japan and nearly all countries in Western Europe.

A description of the agreement is available at www.socialsecurity.gov/international. You can request a booklet with this information by writing to the Social Security Administration, Office of International Programs, P.O. Box 17741, Baltimore, Maryland  21235-7741, or you can call the Social Security Administration's Office of International Programs at (410) 965-7306.