If you’ve paid into Social Security through U.S. payroll taxes, you’re still entitled to receive benefits—even after renouncing your U.S. citizenship.
What changes is how those benefits are taxed. Once you become a non-resident alien, the IRS may withhold up to 30%—unless a tax treaty with your new country reduces or eliminates that.
This guide breaks down exactly what to expect, how to reduce tax withholding, and which countries are most favorable for former U.S. citizens collecting Social Security.
Can I Still Collect US Social Security After Renouncing my US citizenship?
Yes. You do not lose your entitlement to Social Security benefits by renouncing your U.S. citizenship. These benefits are yours as long as you meet the eligibility requirements—typically having earned at least 40 credits (10 years of work history) through payroll taxes paid to the Social Security Administration.
Renouncing citizenship involves surrendering your nationality, not your previously earned benefits. Your monthly Social Security payments continue regardless of your new citizenship status or residence in a foreign country.
However, while your entitlement remains, your tax obligations regarding these payments can become more complicated once you become a non-resident alien (NRA).
How Does the U.S. Tax Social Security Benefits of Former Citizens?
When you renounce your U.S. citizenship, you become a non-resident alien for tax purposes. This change has significant tax consequences for your Social Security benefits. Specifically, the IRS automatically imposes a flat 30% withholding tax on your gross Social Security payments unless a tax treaty with your new country of residence reduces or eliminates this withholding.
For example:
- Australia: Under Article 18 of the U.S.-Australia Tax Treaty, Social Security benefits are taxable only by the U.S. government. As a result, former citizens residing in Australia face the full 30% U.S. withholding tax, even though Australia itself doesn’t tax these payments.
- Canada: The U.S.-Canada Tax Treaty allows Social Security to be taxed only by Canada. Thus, the U.S. withholds no taxes, but Canada treats these benefits as pension income, typically taxing them at lower rates based on your total income.
Because each country has unique treaty rules, the impact on your tax obligations varies dramatically depending on your new residence. To avoid unintended double taxation or unexpected tax liability, carefully consider your destination country’s treaty provisions before initiating the citizenship renouncing process.
Below is a simplified quick-reference guide highlighting how different countries tax your Social Security benefits after renunciation:
Countries with 0% U.S. Social Security Withholding for Former U.S. Citizens
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Countries with 30% U.S. Social Security Withholding for Former U.S. Citizens
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How do I update my citizenship status with Social Security?
To update your citizenship status with the Social Security Administration (SSA) after renouncing your U.S. citizenship, follow these straightforward steps:
- Obtain Your Certificate of Loss of Nationality (CLN)
After receiving final approval from the State Department, you’ll get a CLN proving you’re now a former U.S. citizen. - Contact Social Security
Notify the SSA directly about your change in citizenship status. You can do this through the nearest U.S. Embassy or consulate in your country. Contact details for the appropriate office (Federal Benefits Unit – FBU) are available on the Social Security Administration website. - Provide Required Documents
Typically, you’ll need to submit:- Your Certificate of Loss of Nationality
- Proof of identity (such as your second passport)
- Any additional documents requested by your local embassy or SSA office
Updating this information is important, as your citizenship status affects your Social Security payments, potential Medicare benefits, and related tax obligations. After renouncing U.S. citizenship, your payments as a non-resident alien may become subject to withholding based on a tax treaty or totalization agreement between the U.S. and other countries.
Also remember, your renunciation triggers significant tax implications, such as the exit tax under the Internal Revenue Code, which may involve a deemed disposition of your worldwide assets if you’re classified as a covered expatriate. You must file a final tax return with the Internal Revenue Service and certify compliance with all your federal tax obligations.
Understanding the Exit Tax When Renouncing Your U.S. Citizenship
Renouncing your U.S. citizenship triggers significant tax implications, notably the exit tax, which applies if you’re considered a covered expatriate. Generally, you’re classified as a covered expatriate if you meet specific criteria involving high income, substantial net worth (over $2 million), or incomplete tax compliance in recent years.
The exit tax treats your worldwide assets as sold at fair market value on the day before renunciation, applying U.S. capital gains tax rates on deemed gains. Proper financial planning and thorough evaluation of your net worth and income tax liability prior to renunciation can significantly reduce this potential tax burden.
Want a deep dive into how the exit tax works and who it affects? Read our comprehensive guide: Exit Tax Explained: A U.S. Expat’s Guide to Expatriation Tax
Impact on Medicare Benefits After Renunciation
Former U.S. citizens must be aware that Medicare benefits are typically available only to residents of the United States. After renunciation, becoming a non-resident alien makes you ineligible for Medicare, potentially impacting you and your family members who depend on these benefits.
Carefully consider healthcare options in your new country of residence as part of your broader renunciation strategy, particularly if access to healthcare or Medicare benefits is crucial.
Managing U.S. Source Income After Renunciation
After renouncing your U.S. citizenship, any U.S. source income—such as rental income, dividends, or capital gains from U.S. assets—is still subject to U.S. tax rules. This income is often subject to automatic withholding, and the rates can vary depending on whether your new country has a tax treaty with the U.S.
In most cases, you’ll be required to file Form 1040NR, the U.S. tax return for non-resident aliens, to report and properly assess taxes on this income. Failure to do so can lead to penalties or excess withholding.
If you plan to keep earning income from U.S. rental properties, investments, or any other U.S.-sourced assets, make sure you’re aware of your ongoing tax filing obligations—even after renunciation.
