United States – Key Provisions of Upcoming U.S.-Romania Totalization Agreement

Analysis of Key Totalization Agreement Provisions

Scope of the Agreement

The Agreement applies to individuals who are or have been covered under either country’s social security system, including their dependents and survivors.

Taxes covered by the Agreement

The Agreement applies to the following taxes:

• United States: Federal Insurance Contributions Act (FICA) and Self-Employment Contributions Act (SECA) taxes, including Old-Age, Survivors, and Disability Insurance (OASDI), Medicare taxes, and the Additional Medicare Tax applicable to earnings above specified thresholds ($250,000 for married taxpayers filing jointly, $125,000 for married taxpayers filing separately, and $200,000 for other filers). As with other totalization agreements, the Net Investment Income Tax (NIIT) is not covered.
  
  
• Romania: Contributions financing OASDI pensions, death grants payable to survivors of deceased workers, and health insurance contributions.

An individual (and their employer) who is exempt from social security coverage in one country under the Agreement is generally exempt from the corresponding taxes in that country.

Coverage rules

• Territoriality rule: As a general rule, an individual’s work is subject to the social security system of the country in which the work is performed, unless an exception applies.
  
  
• Detached worker rule: The most common exception is the detached worker rule. Under this rule, an employee assigned by an employer from one country to work in the other country for a period not expected to exceed five years may remain covered under the home country’s social security system and be exempt from the host country’s system. For the United States, this treatment also applies to employees transferred to certain foreign affiliates covered under section 3121(l) of the Internal Revenue Code.
  
  
• Self-employment rule: A similar rule applies to self-employed individuals. Individuals who temporarily transfer their activities to the other country for a period not expected to exceed five years may remain covered under their home country’s system.
  
  
• Third-country transfer rule: The Agreement extends the detached worker rule to certain assignments involving a third country. This can apply when an employee is transferred indirectly from one country to the other through a third country, provided the employee continues to work for the same employer and remains compulsorily covered under the home country’s system.
  
  For example, if an employer assigns an employee from the United States to a third country and maintains U.S. Social Security coverage during that assignment, the employee may subsequently be transferred to Romania and qualify for a detached worker exemption, provided the period of work in Romania is not expected to exceed five years.

• Seafarers and flight crew: The Agreement includes specific rules for individuals who would otherwise be subject to dual coverage:
  
  Seafarers are generally covered by the social security system of the country whose flag the vessel flies.
  
  Flight crew are generally covered by the system of the country in which the employing airline is headquartered. However, if the individual resides in the other country, coverage may instead apply in the country of residence.

• Government workers: Diplomats and other individuals covered by the Vienna Conventions on Diplomatic and Consular Relations are not subject to the Agreement’s coverage rules. Other government workers who are not covered by those conventions and who work in the other country are generally covered by the social security system of their country of nationality.
  
  
• Special exceptions and extension policy: The Agreement allows the competent authorities of the two countries to agree to exceptions to their standard rules in unusual circumstances. While the Agreement does not specify a maximum extension period, extensions may be granted through this exception process.

In practice, extension requests are often made for limited additional periods beyond the initial five-year assignment, subject to agreement between the competent authorities.

Certificates of coverage (COCs)

A COC is typically required to demonstrate that an individual remains subject to one country’s social security system while working in the other country. COCs will be issued by the Social Security Administration (SSA) in the United States and by the National House of Public Pensions in Romania. Applications are generally filed with the issuing authority in the worker’s home country.

For assignments that began before September 1, 2026, the Agreement treats the assignment as beginning on that date for purposes of applying the coverage rules.

Benefit provisions of the Agreement

United States

An individual may qualify for U.S. OASDI benefits based on combined periods of U.S. and Romanian coverage. Eligibility can be established with as few as six U.S. quarters of coverage (QCs), provided the individual otherwise does not meet the requirements for a full benefit (generally 40 QCs for retirement benefits). Romanian coverage periods may be taken into account to meet minimum eligibility thresholds. However, the Agreement is bilateral only, so U.S. coverage generally cannot be combined with coverage from Romania and a third country to qualify for benefits.

Romania

An individual may become eligible for Romanian benefits with as little as one year of coverage. If the individual does not meet the minimum coverage requirement (generally around 15 years for an old-age pension), periods of U.S. coverage may be counted toward that requirement. Romania may also take into account coverage earned in third countries that have social security agreements with both countries when determining eligibility. In addition, where Romanian law provides credits for periods during which benefits are received, Romania may treat periods of receipt of U.S. benefits similarly.

Additional Information on Benefits

Rights to benefits under the Agreement are available beginning September 1, 2026. For U.S. and Romanian lump-sum death benefits, no benefit is payable if the individual died before that date. The Agreement generally permits benefits to be paid to residents of either country. However, certain non-contributory Romanian cash benefits are not payable outside Romania. 

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