Totalization Agreement Us Mexico

A totalization agreement is a social security agreement between two countries that aims to eliminate dual social security taxes for individuals who work in both countries. The United States and Mexico signed a totalization agreement in 2004, which came into effect in 2005.

This agreement is beneficial for workers who are citizens of both countries, as well as for employers who have operations in both countries. Under this agreement, workers do not have to pay social security taxes in both countries for the same work, which can save them a significant amount of money.

The totalization agreement between the US and Mexico also provides for the coordination of social security benefits. This means that if a worker has earned enough credits in both countries, they can qualify for social security benefits from both countries. This is particularly important for workers who have moved between the two countries during their careers.

To be eligible for benefits under the totalization agreement, workers must have earned a certain amount of credits in both countries. In the US, workers earn social security credits based on their earnings, with a maximum of four credits earned per year. In Mexico, workers earn credits based on the number of weeks they work, with a maximum of 52 credits earned per year.

Employers who have operations in both the US and Mexico also benefit from the totalization agreement. Under the agreement, they do not have to pay social security taxes in both countries for the same work, which can lead to significant cost savings.

In conclusion, the totalization agreement between the US and Mexico is a beneficial agreement for workers and employers in both countries. It eliminates dual social security taxes for workers who work in both countries and provides for the coordination of social security benefits. Employers who have operations in both countries can also benefit from the agreement by avoiding dual social security taxes. This agreement helps to promote economic growth and cooperation between the two countries.

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