Self Employment Income: The First Test is Significant Income

Status 4The first of the three tests that the Social Security department will use is going to check and see if someone is either giving significant services or is earning a large income. This test has two separate arms that an individual will need to pass in order to move on to the next test. First, what is meant by “significant services?” This means that someone is either:

The Sole Owner: If someone is the only operator or owner of a business which earns significant income, they may not be able to receive any benefits from Social Security Disability.

More than Half of the Time: If the individual provides more than half of the time needed to manage a business that earns significant income or if they manage the company for more than 46 hours out of a given month, they also may not be entitled to benefits. While the definition of what is meant by “managing” a business might change, those who occupy leadership positions in a business are likely to be categorized as “managing” a business.

If the individual passes the first part of this test, then they will need to see how much money they earn from this business. The amount that disqualifies someone under this test changes from year to year; however, the amount in 2017 was $1170. Anybody who makes more than this amount will be disqualified from receiving additional Social Security disability benefits.

It is important to note that people will have to pass both pieces of this test in order to move on to subsequent tests. Being disqualified under either the “significant service” part of this test or the “significant earnings” part is enough to disqualify someone completely. Because characterizing self employment income is complex, it is important to get advice from a knowledgeable attorney about these issues. Attorney’s at Match and Farnsworth, PC are available to provide assistance.
To learn more about all tests for self employment income, read the complete article here.

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