Thanks everyone for the explanations! I'm glad to know I'm not the only one who was confused by this random deposit. Just as an update - I called my local SSA office this morning (got lucky and got through), and they confirmed it was indeed the COLA backpay. They also said they're still processing these for many people, so don't worry if you haven't received yours yet.

Just wanted to add my experience - I'm a newcomer here but this post was super helpful! I got a similar deposit last week and had no idea what it was. After reading this I checked my benefit verification letter and sure enough, it was COLA backpay for 6 months. Mine went from $1,890 to $1,948 (about 3.1% like someone mentioned). Really appreciate everyone sharing their experiences - makes navigating all this SSA stuff less confusing when you're new to it all!

This is a great question about how Difficulty of Care payments interact with Social Security early retirement benefits. From what I understand, Difficulty of Care payments are generally excluded from the Social Security earnings test because they're considered "in-kind support and maintenance" rather than wages for services. However, there are some important nuances here: 1. The fact that Michigan issues W-2s for these payments is interesting - typically DOC payments aren't subject to FICA taxes, which aligns with what you mentioned. 2. The 45-hour monthly limit you referenced might be related to specific state program guidelines rather than Social Security rules, but it's worth clarifying this directly with SSA. 3. Your small side business income of $2-3K annually is likely well under the 2024 earnings limit ($22,320 for those under full retirement age), so that shouldn't be an issue. I'd strongly recommend calling Social Security directly at 1-800-772-1213 to get official guidance on how your specific DOC arrangement will be treated. You might also want to contact your local Area Agency on Aging or Michigan's Department of Health and Human Services for clarification on the state-specific rules. It's always better to get these clarifications upfront rather than deal with potential overpayment issues later. Have you considered reaching out to SSA yet?

Just to add one more important detail - if you're facing financial hardship, you can request a reduction or removal of the levy by submitting Form 911 (Request for Taxpayer Advocate Service Assistance) or by calling the Taxpayer Advocate Service directly at 877-777-4778. They're separate from regular IRS collections and can sometimes help if you're in a difficult financial situation.

One thing that might help ease your anxiety - you can also check if you qualify for an Offer in Compromise (OIC) with the IRS. If your financial situation makes it unlikely you'll ever be able to pay the full $8,900, they might accept a lower amount as settlement. There's a pre-qualifier tool on the IRS website that can give you an idea if you'd be eligible. It's worth looking into since you're on a fixed income now. The application fee is $205 but it's waived if you meet low income guidelines.

I've been getting Social Security disability for about 8 years now, and I've noticed they seem to send them out in batches based on your Social Security number. People with numbers ending in certain digits get theirs first. My husband and I almost always get ours about 10 days apart even though we're at the same address. Maybe your SSN just puts you in a later batch this year?

I work at a tax preparation office and can confirm that the SSA typically mails out 1099s throughout January, with the deadline being January 31st. What many people don't realize is that the forms are often available online several days before they arrive by mail. If you're having trouble with the SSA website, try calling their main number (1-800-772-1213) early in the morning - wait times are usually shorter between 8-9 AM. Also, if you use a tax preparer, they can often help you access your online account or work with estimated numbers while you wait for the physical form to arrive.

Thank you all for such helpful information! I've learned so much: - IRA withdrawals won't affect the earnings test (big relief) - We can use the monthly rule for my wife's first year of retirement - We should expect 85% of our SS to be taxable (not great news) - We might want to reconsider having my wife claim early We'll definitely sit down with a financial advisor to optimize our strategy. The suggestion about her waiting until FRA or even 70 is interesting - I hadn't considered the survivor benefit angle. I really appreciate everyone taking the time to share your knowledge and experiences!

Welcome to the community! I'm new here but wanted to share something that might help with your tax situation. Since you mentioned being concerned about having 85% of your SS benefits taxed with your planned income levels, you might want to look into tax-loss harvesting from any taxable investment accounts you have, or consider timing your IRA withdrawals more strategically. For example, instead of taking $60K annually from IRAs, you could take larger withdrawals in years when you have lower income (maybe due to medical expenses or other deductions) and smaller withdrawals in years when your income is already high. This could help manage which tax bracket you're in each year. Also, if you have any charitable giving plans, qualified charitable distributions (QCDs) directly from your IRA to charity after age 70.5 can count toward your required minimum distributions but won't be included in your taxable income - which could help reduce that combined income calculation for SS taxation. Just some thoughts from someone who's been researching similar strategies for my own retirement planning!