Muncie Times, Muncie, Delaware County, 7 June 2001 — Page 26

The Muncie Times, June 7, 2001, page 26

SOCIAL SECURITY

Credits earned in S. Korea may supplement U.S. retirement earnings

By James Warmer Social Security Manager in Muncie Have you worked in the United States and South Korea during your career? If so, you may have earned some Social Security credits in each country. But, if you didn’t work long enough to meet minimum eligibility requirements, you may not qualify for Social Security benefits from one or both countries. To help people who have worked in both countries, the United States and South Korea concluded a new Social Security agreement that went into effect April 1. Under this agreement, workers and their families may be able to qualify for partial U.S. or South Korea Social Security benefits based on combined credits from both countries. If you have at least six U.S. Social Security credits, but less than the 40 credits you normally need to get a retirement benefit, Social Security can count your credits under the South Korean system to make up the differences. Assume, for example, that you worked 4 years in the United States earning 16 U.S. credits. In addition, you spent 7 years working in South Korea where you earned 28 Korean credits. Without the agreement, you could not get a U.S. retirement benefit since you don’t have 40 U.S. credits. But, under the agreement, we can add your Korean credits to your U.S. credits to make the 40 credits you need. You would then receive a partial U.S. benefit based on the number of credits you earned in the United States. The agreement can also help you qualify for South Korean benefits even if you do not meet the normal eligibility requirements. The agreement will also eliminate double taxation under the U.S. and South

Korean Social Security systems. Until now, many U.S. citizens working in South Korea for American employers paid Social Security contributions— together with their em-ployers-to both countries. Frequently, South Koreans working in the United States also paid to both countries. The combined U.S. and South Korean contributions paid by an employee and employer could amount to more than 25 percent of the employee’s salary. Under the new agreement, these workers and their employers will pay Social Security taxes to either the United States or South Korea, but not to both. Although the United States has similar international Social Security agreements with 17 other countries, the agreement with South Korea is the first with an Asian country. Our web site at www.ssa.gov/international gives more information about these international Social Security agreements. Social Security Certain World War II veterans who receive a special federal benefit may become eligible to receive supplemental state payments as the result of new legislation. The Consolidated Appropriations Act of 2001, Public Law (P.L.) 106-554, authorizes Social Security to enter into agreements to make the supplemental payments to qualified World War II veterans on behalf of states that opt to pass laws providing for such payments. To receive title VIII payments, World II veterans must meet the following requirements: Be age 65 or older as of Dec. 14, 1999; Have served in the U.S. military during the period beginning Sept. 16, 1940, through July 24, 1947, or serve in the organized

military of the Philippines during the period beginning July 26, 1941, through Dec. 30 1946; Be eligible for Supplemental Security Income (SSI) for December 1999 and at the time they apply for the special veterans benefits; and Have other benefit income that is LESS THAN 75 percent of the current SSI federal benefit rate. Qualified World War II veterans can receive a maximum title VIII payment equal to 75 percent of the federal SSI benefit rate, less the amount of their other benefit income, for months after September 2000 that they live outside the United States. Additional state “recognition” payments that are provided under individual state laws are intended to supplement the title VIII benefits. Social Security Finding out if you owe tax on your Social Security benefits this year is not complicated. But you have to take the time to review all your income and make a few calculations. Following are some tips on how to do it, and also, how you may be able to avoid owing taxes on your benefits in the future: V If you file a federal tax return as an individual and your income is between $25,000 and $34,000, you may have to pay taxes on 50 percent of your Social Security benefits. If your income is above $34,000 up to 85 percent of your Social Security benefits may be taxable. V If you file a joint return, you may have to pay taxes on your benefits if you and your husband or wife have a combined income that is between $32,000 and $44,000. (“Combined” income means the adjusted gross income for you and your spouse as reported on your Form 1040, plus

nontaxable interest plus one-half of your Social Security benefits.) If your combined income is more that $44,000, up to 85 percent of your Social Security benefits is subject to income tax. What can you do to keep from owing money on your Social Security at the end of the year? You probably want to take into account any income over the next year that you can predict. For example, you may want to consider whether the types of investments you have or are making are likely to yield capital gains. If they are, you will need to estimate how much these may be. You may decide you could go over the combined income limits from all potential income. If so, make sure you pay an appropiate amount of income. If so, make sure you pay an appropiate amount of quarterly estimated tax payments. Or, you may want to consider having federal taxes withheld from your Social Security. You are not required to do this, but you may find it easier than making estimated quarterly payments. To have federal taxes withheld from your Social Security, call the Internal Revenue Service at 1-800-829-3676 to request Form W-4V. After completing and signing the form, return it to your local Social Security office by mail or in person. If you want to talk to someone at Social Security about witholding, you can call 1-800-772-1213. You can also ask us for a copy of Tax Information for Older Americans (Pub. No. 554) and Social Security Benefits and Equivalent Railroad Retirement Benefits (Pub. No. 915). Social Security Be sure to check the annual Social Security Statement you get in the mail to see whether your ***. 3ic'A : ;

earnings record is accurate. If you don’t, you could be making a big mistake. It’s important to make sure your record is correct because the Social Security benefits you’ll receive in the future will be based on the earnings your employer (or you, if you are selfemployed) reported to Social Security. If your record isn’t accurate or complete, you may not receive the benefits you are due. Remember, you’re the only the person who will know whether your record is correct and complete. If you find a mistake, call us at 1-800-772-1213. However, some, or all of your earnings from 2000 may not be shown on your current statement. It may be that we were still processing last year’s earnings reports when your statement was prepared. Your complete earnings for last year will be shown on next year’s statement. And after you’ve checked your record, we hope you’ll use your social security statement to help you plan your financial future. In addition to showing you how much you’ve paid into Social Security, it provides estimates of the monthly Social Security retirement, disability and survivors benefits you and your family could be eligible to receive now and in the future. V To get more information about social security, visit www.ssa.gov/mystatement at any time. You can also call our toll-free number 1-800-772-1213, to speak to a service representative between 7 a.m. and 7 p.m. on business days. Our lines are busiest early in the week and early in the month, so, if your business can wait, it’s best to call at other times._ V ..; V . V)V4

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