AOW, healthcare and tax in America: what comes along, what stops — and what works like this nowhere else

Your AOW (the Dutch state pension) goes with you to America in full, but stays taxed in the Netherlands, and you arrange your health insurance there entirely yourself. For the AOW and pensions, America is better arranged than its reputation. At a glance:

• Thanks to the 1990 social security agreement the accrued AOW travels with you in full.
• The notorious WEP reduction of Social Security, the American state pension, has been abolished by law.
• The AOW remains, uniquely among destinations, taxed exclusively in the Netherlands (article 19, paragraph 4 of the tax treaty).
• For healthcare there is no treaty route and no safety net: you insure yourself.

What happens to your AOW?

The Netherlands and the US have had a social security agreement since 1 November 1990. That puts America on the SVB's list of treaty countries. The AOW is simply paid there, in dollars. Single people also don't drop to the married rate (the lower AOW for those who live together), as happens outside treaty countries.

The accrual does stop on your departure day, and each missed year costs 2%. Whoever wants to repair that registers within one year for voluntary continuation:

• at most ten years;
• at 17.9% of your income;
• in 2026 at least € 569 and at most € 5,693 a year.

If you work in the US, you build up Social Security there. The agreement lets both systems exist side by side: each country pays its own share. If you fall short on the American side, your Dutch years count towards a partial American benefit. The condition is that you have at least six American credits (a year and a half of work). Credits are the units in which you build up Social Security.

And there is good news that older forums don't know yet. The Windfall Elimination Provision was a reduction of Social Security for those who also received a foreign pension such as the AOW. It was abolished by the Social Security Fairness Act of 5 January 2025, for benefits from January 2024 onwards.

Item	Rule or figure
AOW in the US	in full, in dollars (treaty country since 1 November 1990)
Accrual per insured year	2%
Voluntary insurance	register within 1 year; at most 10 years; 17.9%, € 569 to € 5,693 (2026)
Dutch years counting for Social Security	from 6 American credits
WEP reduction	abolished for benefits from January 2024
Tax on the AOW	Netherlands only (article 19, paragraph 4)
Tax on occupational pension and annuity	country of residence, so the US (article 19, paragraph 1)
Lump sum within 5 years of emigrating	the Netherlands may tax too (article 19, paragraph 2)
Healthcare via the CAK	none: the US is not on the list of treaty countries

Who taxes your pension?

The 1992 tax treaty follows the familiar lines for wages and pensions: wages are taxed where you work, your occupational pension and annuity where you live. An ABP pension from government service stays taxed in the Netherlands. That is the familiar exception, with a twist here: if besides resident you also become an American citizen, that pension too moves to the American tax authority (article 20, paragraph 2).

But for the AOW and other social security benefits the US route differs from every other destination on this site. They remain taxed exclusively in the Netherlands (article 19, paragraph 4). So the Netherlands simply withholds on your AOW, while your occupational pension is taxed in America. For the latter you apply for an exemption declaration, so your pension fund stops Dutch withholding.

One warning for those who want to be creative. A lump sum, or a non-periodic payment from employment exercised in the Netherlands, may still be taxed by the Netherlands if you were a Dutch resident in the five years before the payment.

And don't forget the American side. Once you are a tax resident (the substantial presence test, a count of your days in the country), the US taxes your worldwide income.