Work And Payments

Social Security had rules about work as it relates to the disability process. People who work and apply for Social Security disability are limited in how much money they can earn from work. Because people have all different types of jobs and all different types of payment schedules it is important to understand when Social Security credits payments through its cash-pay test and how it is applied. Social Security credits payments when they are made, not when the work is performed.

“In applying the cash-pay test, payments are credited as wages for Social Security purposes at the time your wages were paid. Therefore, if you were paid $150 in 1980 for agricultural labor, the entire $150 is counted as wages for 1980, even though part or all of the work may have been done in 1979.”

Statements Of Employee Earnings

Every employer subject to Social Security taxes must provide written statements of earnings to employees. IRS Form W-2 (Wage and Tax Statement) is generally used for this purpose. The statement must show:

  1. The name, address, and identification number of the employer;
  2. The name, address, and Social Security number of the employee;
  3. The total amount of wages (including tips reported to the employer by the employee) subject to Social Security and Medicare taxes which were paid to the employee during the calendar year;
  4. The amount of the Social Security and Medicare taxes deducted from the employee’s wages;
  5. The total amount of tips reported to the employer which is subject to Social Security and Medicare taxes; and
  6. The amount of the Social Security and Medicare taxes, if any, the employee still owes on tips reported to the employer.

When Are Statements Provided To Employees?

These statements must be given to employees as follows:

  1. No later than January 31 following the calendar year in which the wages were paid; or
  2. An employee who stops working before the end of a year and does not expect to return to work that year may ask the employer for an earlier statement. The statement must be furnished by the latest of the following:
  3. 30 days after the date of the employee’s request;
  4. 30 days after the last wages were paid; or
  5. 30 days after the death of the worker, in which case the statement is sent to the next of kin as well as to IRS.