International Programs
Totalization Agreement with Iceland
Introduction
For Iceland, the Agreement covers taxes for public pensions, unemployment, health insurance, old-age retirement, survivors, and disability benefits.
The U.S.-Iceland Agreement does not apply to certain provisions of Icelandic law. These provisions include social assistance programs such as a supplement providing social assistance for disabled workers with low income or caring for a minor child, as well as for workers under a disability meeting certain recency-of-work requirements while residing in Iceland and contributing to an Icelandic Pension Fund.
In addition, the U.S.-Iceland Agreement excludes provisions for a child benefit payable to old-age workers in special circumstances, such as prison incarceration or children of questionable paternity. Additionally, with respect to the invalidity benefit, the U.S.-Iceland Agreement does not include a provision for calculating periods of residence in Iceland prior to a person's attainment of age 67.
The U.S.-Iceland Agreement waives a requirement that a person must have worked recently in Iceland in order to be entitled to periodic adjustments to Icelandic second pillar benefit as stated in the Icelandic Act on Mandatory Pension Insurance and on the Activities of Pension Funds.
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Eliminating dual coverage for self-employment
- Self-employed workers who reside in the United States are assigned U.S. coverage.
- Self-employed workers who reside in Iceland are assigned Icelandic coverage.
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Icelandic certificates for employees and self-employed workers
Employers and self-employed workers must request a certificate of coverage ((form IC /USA1) to establish an exemption from U.S. Social Security contributions.
Please mail your request to:
Tryggingastofnun (social security)
Hlíðasmára 11,
201 Kópavogur
Iceland
Official webpage: https://www.tr.is/
Please provide the following information:
- Worker's full name (including maiden name);
- Worker's date of birth;
- Worker's place of birth;
- Worker's country of citizenship;
- Worker's country of permanent residence;
- Worker's Icelandic Kennitala (kt) Number, if applicable;
- Worker’s U.S. Social Security number;
- Date of hire, if employed;
- Country of hire, if employed;
- Nature of self-employment activity, if applicable;
- Name and address of the employer in the United States and the Agreement country (if self-employed, address of trade or business in both countries);
- Date of transfer and anticipated date of return of employment or self-employment in the Agreement country;
- Spouse first and last name;
- Spouses Iceland social security number (if known);
- Spouse date of birth; and
- All children’s first and last names; date of birth, and Iceland social security numbers (if known).
U.S. employers should retain certificates of coverage in case of an audit by the IRS. Employers should not send a copy to the IRS unless the IRS specifically requests the certificate of coverage.
Self-employed workers should attach a copy of the certificate of coverage to their U.S. tax return every year as proof of the exemption.
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Monthly benefits
Under U.S. Social Security, you may earn up to four credits each year depending on the amount of your covered earnings. For example, in 2022, you receive one credit for each $1,410 of your covered annual earnings up to a maximum of four credits per year. The amount needed to earn a work credit increases slightly each year. For more information, see How You Earn Credits (Publication No. 05-10072).
The Icelandic social security system measures periods of coverage in months. For example, 12 months of Icelandic coverage is equal to four U.S. credits. For simplicity, the following table shows the number of credits a person needs to qualify for an Icelandic benefit in terms of years.
|
Retirement or old-age benefits |
|
United States |
Iceland |
Worker—Full benefit at full retirement age.* Reduced benefit as early as age 62. Required work credits range from one and one-half to 10 years (10 years if age 62 in 1991 or later). |
Worker— Age 67 with at least 40 years of contributions (private sector employees) or age 65 with at least 32 years of contributions (public-sector employees). |
*Full retirement age is 66 for people born in 1943-1954 and will gradually increase to age 67 for people born in 1960 or later.
Disability benefits |
|
United States |
Iceland |
Worker—Under full retirement age* can get benefit if unable to do any substantial gainful work for at least a year. One and one-half to 10 years credit needed, depending on age at date of onset. Some recent work credits also needed unless worker is blind. |
Worker— Aged 16 to 67 and resident of Iceland for at least three years before a claim is made. Must have an assessed loss of earning capacity of at least 75% as a result of a medically recognized disease or disability and have annual income below 4,488,596 Kronur. |
*Full retirement age is 66 for people born in 1943-1954 and will gradually increase to age 67 for people born in 1960 or later.
|
Family benefits to dependents of retired or disabled people |
|
United States |
Iceland |
Spouse—Full benefit at full retirement age* or at any age if caring for the worker’s entitled child under age 16 (or disabled before age 22). Reduced benefit as early as age 62 if not caring for a child. |
Spouse—No provision. |
Divorced spouse—Full benefit at full retirement age.* Reduced benefit as early as age 62. Must be unmarried and have been married to worker for at least 10 years. |
Divorced spouse—No provision. |
Children—If unmarried, up to age 18 (age 19 if in an elementary or secondary school full time) or any age if disabled before age 22. |
Children— Under age 18. |
*Full retirement age is 66 for people born in 1943-1954 and will gradually increase to age 67 for people born in 1960 or later.
|
Survivors benefits |
|
United States |
Iceland |
Surviving Spouse—Full benefit at full retirement age* or at any age if caring for the deceased’s entitled child under age 16 (or disabled before age 22). Reduced benefit as early as age 60 (or age 50 if disabled) if not caring for child. Benefits may continue if remarriage occurs after age 60 (or age 50 if disabled). Divorced Surviving Spouse—Same as surviving spouse if marriage lasted at least 10 years. Children—Same as for children of retired or disabled worker. |
Surviving Spouse (or cohabitating partner)— Survivors include orphans. Paid if the deceased had at least 24 months of contributions during the 36 months before death or was an old-age or disability pensioner at the time of death. The surviving spouse’s pension ceases at remarriage. |
Lump-sum death benefit—A one-time payment not to exceed $255 payable on the death of an insured worker.. |
Lump-Sum Death Benefit—A lump sum of 549,135 Kronur to 1,648,002 Kronur, depending on the degree of necessary support, is paid to children with a disability older than age 16 who were supported by the deceased. |
*The full retirement age (FRA) for survivors is age 66 for people born in 1945-1956. Beginning with anyone born in 1957, the FRA gradually increases per birth year until it reaches age 67 for people born in 1962 or later.
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How benefits can be paid
If you have social security credits in both the United States and Iceland, you may be eligible for benefits from one or both countries. If you meet all the basic requirements under one country’s system, you will get a regular benefit from that country. If you do not meet the basic requirements, here is how the Agreement may help you qualify for a benefit:
- Benefits from the United States—If you do not have enough U.S. work credits to qualify for regular benefits, you may be able to qualify for a partial benefit from the United States with both United States and Icelandic credits. However, for us to count your Icelandic credits, you must have earned at least six credits (generally one and one-half years of work) under the U.S. system. If you already have enough credits under the U.S. system to qualify for a benefit, the United States cannot count your Icelandic credits.
- Benefits from Iceland— If you do not have enough work credits under the Icelandic system to qualify for benefits, Iceland can count your credits under the U.S. Social Security system to help you qualify for Icelandic benefits. To be eligible to have your United States and Icelandic credits counted, you must have at least 12 months of coverage credited under the Icelandic system.
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Claims for benefits
If you live in the United States and wish to apply for United States or Icelandic benefits:
- Visit or write any U.S. Social Security office.
- Phone our toll-free number, 1-800-772-1213, 8 a.m. to 7 p.m. any business day. People who are deaf or hard of hearing may call our toll-free TTY number, 1-800-325-0778.
- Complete SSA-2490-BK (Application for Benefits Under a U.S. International Social Security Agreement) and mail to your local Social Security Administration office.
If you live in Iceland and wish to apply for benefits, contact:
Federal Benefits Unit
United States Embassy
PO Box 4075 AMB
0244 Oslo
NORWAY
- Any Icelandic Tryggingastofnun (social security) office to ask for Icelandic benefits.
If you have not applied for benefits before, you may need to provide certain information and documents when you apply.
This may include:
- The worker’s U.S. Social Security number;
- Icelandic Kennitala (KT) number;
- Proof of age for all claimants;
- Evidence of the worker’s U.S. earnings in the past 24 months; and
- Information about the worker’s coverage under the Icelandic system.
You may wish to call the social security office before you go there to see if you need to provide any other information.
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Payment of benefits
Each country pays its own benefit. The U.S. Department of Treasury makes U.S. payments each month that cover benefits for the preceding month. Under the Icelandic system, the Central Administration of National Pension Insurance makes payments each month that cover benefits for the current month. For more information, contact the Icelandic authorities at the address in the section titled, “For more information.”
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For more information about Iceland's social security programs
For more information about Iceland’s social security programs, visit any social security office in Iceland, or write to:
Tryggingastofnun (social security)
Hlíðasmára 11,
201 Kópavogur
ICELAND
Official webpage: https://www.tr.is/