Is unemployment considered earned income for social security benefits - NYS Department of Labor question
I'm getting close to retirement age and currently collecting unemployment from NYS Department of Labor after my company downsized. My question is whether my weekly unemployment benefits count as earned income when it comes to social security calculations? I'm trying to figure out if I should start collecting social security now or wait, and whether the unemployment will affect my future benefits. Has anyone dealt with this situation before?
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NebulaKnight
Unemployment benefits are NOT considered earned income for Social Security purposes. They're classified as unearned income, so they won't count toward your work credits or affect your Social Security benefit calculations. However, if you're already receiving Social Security benefits, unemployment might affect the taxation of those benefits depending on your total income.
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Dylan Wright
•That's a relief! So my NYS Department of Labor benefits won't hurt my future social security amount. But what do you mean about taxation if I'm already getting social security?
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Sofia Ramirez
wait i thought all income counted for social security?? this is confusing because my neighbor said his unemployment affected his benefits somehow
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Dmitry Popov
•Your neighbor might be thinking of a different situation. If he was receiving Social Security Disability (SSDI), then yes, unemployment can sometimes affect those benefits because you're claiming you're able to work while collecting unemployment. But regular retirement Social Security is different.
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Ava Rodriguez
I was in the exact same situation last year! NYS Department of Labor unemployment doesn't count as earned income for SS purposes, but it does count toward your total income for tax purposes. So if your combined income (SS + unemployment + any other income) exceeds certain thresholds, you might have to pay taxes on part of your Social Security benefits. For 2025, I think the threshold is around $25k for single filers.
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Dylan Wright
•Thanks for sharing your experience! Did you end up having to pay taxes on your social security because of the unemployment?
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Ava Rodriguez
•Yeah, I did have to pay some taxes on my SS benefits because my total income went over the threshold. It wasn't terrible but definitely something to plan for.
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Miguel Ortiz
The whole system is so confusing! I've been trying to get through to NYS Department of Labor for weeks to ask about how my unemployment affects other benefits. Their phone lines are always busy and I keep getting disconnected. Has anyone found a way to actually talk to someone there?
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Zainab Khalil
•I had the same problem with getting through to NYS Department of Labor until someone told me about Claimyr. It's a service that helps you get connected to unemployment agents by phone. Check out claimyr.com - they have a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. I was able to get my questions answered within a day instead of weeks of trying.
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Miguel Ortiz
•Interesting, I'll check that out. At this point I'm willing to try anything to get some real answers about my benefits.
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QuantumQuest
Just to add - if you're planning to start collecting Social Security while still getting unemployment, make sure you understand the earnings test if you're under full retirement age. But since unemployment isn't earned income, it shouldn't trigger the earnings test anyway.
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Logan Scott
This is really helpful information everyone! I'm in a similar boat - been laid off from my job at 62 and trying to figure out the best strategy. Just to clarify what I'm understanding: my NYS unemployment won't reduce my future Social Security retirement benefits, but if I start collecting SS now while getting unemployment, the combination might push me into a tax bracket where I have to pay taxes on the SS benefits? Also wondering if there are any other programs or benefits that unemployment might affect - like Medicare eligibility timing or anything else I should be aware of?
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Sean O'Donnell
•You've got it exactly right! Your NYS unemployment won't reduce your future SS benefits since it's not earned income, but the combination could make your SS benefits taxable if your total income exceeds the thresholds. As for other programs - unemployment shouldn't affect Medicare eligibility since that's based on age (65) or disability status, not income. However, if you're looking at any income-based programs like SNAP or Medicaid, unemployment would count as income there. One thing to also consider is that if you start SS early at 62, you'll get reduced benefits for life compared to waiting until full retirement age, but that's separate from the unemployment issue. Have you calculated what the difference would be in your monthly SS payment if you start now versus waiting?
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