UN and International Organization Employees: US Tax Exemptions

Employees of the United Nations, and of most international organizations with headquarters agreements with the US, are exempt from US Social Security and Medicare taxes on their UN salaries under Article 34 of the UN Charter, with similar provisions in the International Organizations Immunities Act for other qualifying organizations. This exemption does not eliminate US income tax, which still applies to the full salary of US citizens and green card holders working at the UN or similar bodies. To partially compensate for the lack of Social Security coverage, the UN runs a Joint Staff Pension Fund (JSPF), and the US tax treatment of JSPF contributions and distributions depends on specific agreements between the US and the UN rather than the standard pension rules. US citizens employed at the UN or a similar organization should carefully track their JSPF contributions and the US tax treatment each year, since this is an area that many general tax professionals are not familiar with. The Foreign Earned Income Exclusion may still apply to international organization employees whose tax home is in a foreign country and who qualify under the residency or presence tests.