Washington -- The United States and Mexico moved a step closer to ending the practice of “double taxing” Social Security, signing an agreement last week that applies to roughly 13,000 workers in both countries.
Prior to the pact, U.S.-based companies that had citizens employed in Mexico had paid into the Social Security systems for both countries, as did companies headquartered in Mexico that employed workers in the United States.
According to published reports, under the recently inked pact, workers and their respective families could qualify for prorated U.S. or Mexican benefits -- a calculation based on combined credits from both nations.
The Social Security Administration estimated the tax savings to be roughly $140 million over the initial five years of the agreement. There are approximately 3,000 U.S. citizens employed in Mexico and some 10,000 Mexicans in the U.S. working under the aegis of Mexican firms.
However, the agreement still awaits approval by the Senate in Mexico and must be reviewed by Congress.
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