08 Jun Can illegal immigrants get Social Security?

Q. I know there are illegal immigrants here who pay taxes. Does that mean they will get Social Security when they retire? How does that work? What about someone who works here for years, even a citizen, but then retires to another country?
— Citizen

A. With all the recent talk about immigration, we’re glad you asked the question. There are lots of rumors around, and false information spreads like wildfire.

Here’s how it works.

Illegal immigrants cannot legally obtain Social Security numbers, said Kenneth Bagner, a certified public accountant with Sobel and Co. in Livingston.

He said if an illegal immigrant has a Social Security number, fraud has been committed.

“My understanding is that some illegal immigrants legitimately have an ITIN,” Bagner said. “An ITIN is an individual tax identification number. It is for foreigners who have income from the U.S. that is not subject to Social Security tax but is subject to income tax.”

For example, he said, if a Canadian citizen directly buys General Motors stock, he would need an ITIN.

Illegal immigrants get an ITIN and then pay income taxes but not Social Security taxes, Bagner said.

Then there are U.S. citizens who retire to foreign countries. They can collect Social Security, Bagtner said.

“U.S. citizens, even if they live in a foreign country permanently, have to file a U.S. tax return,” he said. “Generally, they receive a tax credit from the U.S. for foreign taxes paid.”

That means they may pay little or no U.S. tax, he said.

Bagner said it’s very important for those U.S. citizens to check the U.S. tax treaty with their resident country because the tax treaty may significantly affect their tax filing.

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This post was first published in June 2017.