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Wages for Social Security Purposes

Excerpted from "Social Security Handbook". See the up-to-date, official Social Security Handbook at ssa.gov.

1300

1300. Wages for Social Security Purposes

1300.1 What are "wages"?

"Wages" means all payment for services you perform for your employer. Wages do not have to take the form of cash. The cash value of all compensation paid to you in any form other than cash is also considered wages (unless the form of payment is specifically not covered under the Social Security Act).

1300.2 What types of income are considered wages?

Wages include bonuses, commissions, fees, vacation pay, cash tips of $20 or more a month, and severance pay.

1300.3 What types of income are NOT considered wages?

Types of income that are not wages include capital gains, gifts, inheritances, investment income, and jury duty pay.

Last Revised: March, 2001


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There are 15 Comments

Why severance pay is considered part of wages por income tax purpose?. This is a benefit that a company give to employees when they reduce or lay off personnel. I was laid off in June 2004 at the age of 61 and 30 years of work. The company provided me a severance pay for one year starting July 2004 until July 2005 with no labor involvement. On October 2004 I got interviewed by a Social Security employee representative in regards my benefits in 2005 when I became 62 Years old. I presented all the documentation he asked for included the severance papers that shows how much I was receiving in benefits without labor involvement. He read and took copies of all documentation I presented. In my interview I mentioned him if the severance pay would be an obstacle to receive my social security benefits. He said was no problem and no conflict of interest. He scheduled to received my Social security benefit starting March 2005. On August 31, 2008 I received a letter from the Social Security Administration in which they stated that I was working that year which is not true and was paying taxes and Social security taxes in 2005. Now they demand that I have to reimburse around 13,000 Dollars. I stopped working in June 2004 ,since then I never worked. Why an employee or representative of the Social Security that I got interviewed in October 2004 didn't advice in the correct manner since I was ignorant of this matter?

i have a question i can't seem to find anywhere, i hope someone can answer this. are children that receive payments through a parent's disabilty able to work a part time job? if so how much are they allowed to make? Thank you

In general, if you draw Social Security retirement benefits and work, your earnings affect your retirement benefit after a certain limit.

However, for the case you describe, I have not seen a "child's earnings limit" which would affect disability payments where the disability benefit is based on a work record.

If you receive SSI disability, the child's earnings may be considered "deemed income" if the child lives with you.

http://www.ssa.gov/ssi/spotlights/spot-deeming.htm

If you are going to be 62 in a few days and have been getting workman's comp payments from an injury that has not been settled yet (and may not be for several more months) can you still apply for social security benefits? If so, will they subtract any money from your social security checks because you are getting workmans comp payments? (I'm 'not' talking about social security disability.)

Disability payments from private sources, such as private pension or insurance benefits, do not affect your Social Security disability benefits.

However, workers’ compensation and other public disability benefits may reduce your Social Security benefits. Workers’ compensation benefits are paid to a worker because of a job-related injury or illness. They may be paid by federal or state workers’ compensation agencies, employers or by insurance companies on behalf of employers.

http://www.ssa.gov/pubs/10018.html

How can I get a copy of my earnings from your office?

Unfortunately, it's become more difficult to obtain these statements. You may be able to get one directly from your local Social Security office.

Here's a March 9, 2011 statement from Michael Astrue, Commissioner, Social Security Administration on this :

Each year we send Social Security Statements to non-beneficiaries who are over age 25. These annual Statements cost us approximately $70 million each year to print and mail. In order to conserve funds, we will suspend the current contract and stop sending out these Statements. Individuals contemplating retirement can get real-time information about the amount of their benefits on our highly regarded Retirement Estimator, available on-line at the Social Security website. Field offices may also provide Statement data. After we negotiate a new contract, we will send Statements only to people age 60 and over and people under age 60 upon request. We also are working on making the Statements available online.

http://www.ssa.gov/budget/Final5_SSA%20Budget%20Testimony%20-%20UPDATED%...

The Social Security Administration is known to have made mistakes in the past. How can I review the statement for accuracy if I can't get a copy?

I have seen indications that the SSA wants to provide an online service so folks can check their earnings history online. However, I have not seen an indication of when this may be available.

In the meantime, you'll want to save any previous Earnings Statements which were sent to you (they were sent yearly until the past couple years). Also, you'll want to save W-2 statements or annual pay statements from your employer as proof of your employment history.

The above statement from Mr. Astrue indicates you may be able to receive a statement at no cost if you actively request one from the SSA. Try phoning or contact your local office

If you're really concerned, you can request a work history from the SSA, but there will be a modest fee ($15 and up).

http://www.ssa.gov/statement

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/72

http://ssa.gov/pubs/10081.html

My transcription job will be ending about February. The government mandates medical offices to start using computerized transcription by the year 2014 and my office is going to do so in 2012. I do not know if I will have another job in 2012 to bring in as much money as my present job. I will be 65 December of 2012. Should I apply now for SS or wait until I am closer to 65. I most definitely will have less pay in the year 2012.

There is not an easy answer to this question as there are a number of factors to consider.

There are at least three things to consider :

  • Waiting will increase your monthly benefit.
  • You may be penalized if you start benefits and return to work and make too much in salary.
  • Your tax situation. Social Security benefits can be subject to income tax.

Your "full retirement" age is 66. Each month you delay will increase your benefit by about 0.5 percent if you're the primary wage earner (not a spousal benefit). You may want to try to delay as long as possible.

Contact Social Security directly to see your benefit estimate before deciding.

http://www.ssa.gov/retire2/applying1.htm

http://www.socialsecurity.gov/retire2/agereduction.htm

http://www.socialsecurity.gov/retirement/1943.html

Is a pension considered wages?

I have not received a social security statement for 2011. I did receive a 2010 social security statement. Please send my 2011 statement to MJP at Belle Fpurche, SD.
Thank you.


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