Skip to main content

MinstryCPA Special Topic: Who is Qualified for Social Security Benefits?

Question:

I am nearing retirement age, and hoping to collect Social Security once I reach full retirement age (FRA). I have worked for a few years recently, but never had a full-time job before that. I have never been disabled. How will I know whether I have earned enough income subject to Social Security tax to collect benefits when I retire?

Answer:

In order to be eligible to receive Social Security benefits, you need to accumulate 40 work credits. According to the Social Security Administration, "In 2013, you receive one credit for each $1,160 of earnings, up to the maximum of four credits per year." Each year, the amount of earnings required for a credit is adjusted based on nationwide average earnings. An individual with 10 years of work, earning at least 4 quarters worth of the minimum income required per year, will earn 40 credits and be eligible for benefits.

While an individual cannot earn more credits above $4,640 in a year, the amount of benefits is based on full earnings for the year. Essentially, while higher income cannot lead to more than 4 credits, it will lead to higher benefits once an individual becomes eligible and begins to collect. As is the case with our other posts on the topic of Social Security, individuals who are disabled, survivors, dependent children, and others in special circumstances may fall under other guidelines. 

Source: Social Security: Retirement Benefits

Comments

Popular posts from this blog

Qualified Small Employer HRAs

On December 13, 2016, President Obama signed the 21st Century Cures Act, allowing qualified small employers to offer Health Reimbursement Arrangements (HRA) that follow certain terms.

After the Affordable Care Act was passed, the IRS originally determined that an HRA was not a qualified group health plan. The Cures Act overrules this decision. HRAs are again an option for qualifying small employers.

To be eligible, the small employer must have fewer than 50 employees and must not offer a group health plan to any of its employees.

The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) must be subject to the following terms.
No salary reduction contributions may be made (i.e., 100% employer-funded).Employer must receive proof of employee’s minimum essential coverage.Reimbursements must be for qualifying medical expenses.Reimbursements for any year cannot exceed $4,950 (or $10,000 for family coverage), which will be adjusted annually for inflation.Employer must offer the …

Gifts Paid Out of Church Funds: Form 1099-MISC Requirements

Question:
 A church gave a wedding gift of $1000 to a couple who are church members. No goods or services were provided by the couple in exchange for the gift.  Is a Form 1099-MISC required? 
Answer: In the following answer, we assume that the couple are not employees of the church from whom the gift could not be viewed as compensation for their services. Also, the amount seems to be small enough to avoid any concerns of "private inurement."

Accordingly, no Form 1099-MISC is required. According to the 2017 IRS Instructions for Form 1099-MISC a Form 1099-MISC is only required for payment of goods or services. The requirements are as follows:
"File Form 1099-MISC, Miscellaneous Income, for each person to whom you have paid during the year:  At least $10 in royalties (see the instructions for box 2) or broker payments in lieu of dividends or tax-exempt interest (see the instructions for box 8);  At least $600 in:  1. Rents (box 1);  2. Services performed by someone who is not your …

Revised Form I-9 Released

The U.S. Citizenship and Immigration Services released a revised Form I-9. All new hires after January 21, 2017, must complete the revised Form I-9. All prior released versions of Form I-9 will be invalid for new hires.

Employers are required to have a completed hard copy of Form I-9 on file for each employee. Current employees do not need to re-complete the revised form.

More information on Form I-9 can be found on the USCIS website.