For Americans working in Italy—whether as freelancers, business owners, or employees—navigating the world of social security contributions can be overwhelming. You may be wondering: will I have to pay into both U.S. Social Security and Italy’s INPS? What happens when I retire? Do I lose access to my U.S. benefits?
Fortunately, the U.S.–Italy Totalization Agreement exists to prevent exactly these kinds of problems.
What Is a Totalization Agreement?
The U.S. has signed Totalization Agreements with over 30 countries, including Italy, to avoid dual social security taxation and to coordinate benefits for people who split their careers between countries.
The U.S.–Italy agreement was signed in 1973 and entered into force in 1978. It was a historic agreement and one of the first of its kind. It’s an excellent example of the long and close relationships the two countries share. Its goals are:
- To ensure you don’t pay into two social security systems for the same work
- To combine coverage periods from both countries to qualify for benefits
- To assign social security coverage to just one country at a time, based on your work situation
How the Agreement Works in Practice
1.
Which Country Gets to Tax You for Social Security?
The agreement uses a “territoriality rule”:
- If you’re working in Italy, you pay into Italy’s system (INPS)
- If you’re working in the U.S., you pay into U.S. Social Security
2.
Temporary Assignments (Up to 5 Years)
If your U.S. employer sends you to Italy for 5 years or less, you can continue paying into U.S. Social Security and avoid INPS. This is a specific procedure that the employer must follow.
To do this:
- Request a Certificate of Coverage from the Social Security Administration (SSA)
- Correct Forms and Registrations
- Present it to INPS to avoid Italian contributions
The reverse applies to Italians sent to the U.S.
3.
Self-Employment
If you’re self-employed in Italy (e.g. Partita IVA), you’re generally covered by INPS, not U.S. Social Security—even if you exclude income under the FEIE (Form 2555).
Combining Work Periods (Totalization for Eligibility)
If you don’t qualify for U.S. or Italian benefits on your own, you can combine contributions (called “totalization”) to meet minimum eligibility thresholds.
For example:
- U.S. Social Security requires 40 quarters (10 years) of work
- If you worked 5 years in the U.S. and 7 years in Italy, you may still qualify using the agreement
Each country calculates your benefit based only on the earnings within its system, but may use the combined time to determine eligibility and final payout.
U.S. citizens with a Partita IVA in Italy must pay close attention to self-employment (SE) tax rules.
If you’re enrolled in an INPS scheme—such as Gestione IVS (for artisans and merchants) or Gestione Separata (for freelancers)—you are covered by the Italian social security system. Because Italy has a Totalization Agreement with the United States, you are exempt from U.S. SE tax in this case.
However, if you have self-employment income but are not enrolled in INPS, or if your income comes from a country that does not have a Totalization Agreement with the U.S., you may still owe U.S. SE tax at 15.3% on up to $176,100 of earnings (as of 2025).
Working in a Third Country (e.g. Spain or Germany)
If you live or work in a third country that also has a totalization agreement with both the U.S. and Italy (e.g. Germany, Spain, France), things can become more complex.
Generally:
- You are only covered by one country’s system at a time
- The country of your employer or self-employment usually determines where you pay
- You may be able to combine work periods across all three countries to qualify for a pension, depending on bilateral treaties and in which country you make your first benefit request.
However, the U.S. does not allow multilateral aggregation, so only periods from one foreign country at a time can be combined with U.S. coverage. The EU, by contrast, may allow combination across EU countries. (Regulation (EC) No 883/2004)
This means you may have to strategically choose which country to apply through based on which is most beneficial for your circumstances.
What If You Have a Pension From a Country With No Agreement?
If you receive (or will receive) a pension from a country that does not have a totalization agreement with the U.S. (e.g. Argentina, Venezuela, or many developing countries), the situation changes:
- You must pay into both systems if you’re working between that country and the U.S.
- You may not be able to combine work periods to qualify for benefits
- The U.S. Windfall Elimination Provision (WEP) may reduce your U.S. Social Security if the foreign pension is considered a substitute for U.S. Social Security
- It pays to be strategic about where you apply for your pension. It is important to run the calculation under all three systems and perform the steps in the right order in the right country.
- It may make sense to organise a legal entity to do business in that country instead of operating in your name as a natural person.
If you’re eligible for a foreign pension and U.S. Social Security, consult a tax advisor to determine whether WEP will reduce your benefits and whether any foreign tax credits apply.
Common Mistakes and Problems
- Failing to request a Certificate of Coverage when working abroad, leading to unexpected double contributions.
- Assuming the FEIE excludes self-employment tax — it doesn’t
- Overlooking WEP when receiving both U.S. and foreign pensions
- Choosing the wrong ATECO code in Italy and being placed in the wrong INPS category
- Assuming your Partita IVA income doesn’t need to be reported in the U.S. — it does!
Final Thoughts
The U.S.–Italy Totalization Agreement is a powerful tool for avoiding double social security taxation and ensuring you don’t lose out on benefits when you split your career between countries. But it’s only effective if used properly.
If you’re self-employed in Italy, sent abroad on assignment, or nearing retirement with credits in multiple countries, make sure you understand how to:
- Acquire an INPS Certificate to prove your Coverage
- File Form 8833 with your U.S. tax return
- Track your INPS and SSA contributions
- Avoid unnecessary tax or loss of benefits
Need help? We are experienced tax professionals familiar with both U.S. and Italian systems who can make sure you stay compliant—and save money.
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