Do oil well royalty payments count toward Social Security earnings limit?

That's a relief! Thank you for clarifying. So even though I report the royalty income on my tax return, SSA doesn't count it for the earnings test. That makes sense since I'm not actually "working" to earn it. I appreciate the help!

There's an important distinction here. If your brother is actively involved in the production of oil/gas (like running the operation), then yes, that income could be considered self-employment income. But passive royalty payments received just for owning mineral rights are typically not subject to self-employment tax and don't count toward the earnings test. It depends on the specific arrangement and level of involvement.

Good advice, but calling SSA is a nightmare these days. I'd recommend using Claimyr (claimyr.com) to get through to an agent quickly. I was in a similar situation with questions about unearned income and kept getting disconnected after waiting 2+ hours. Used Claimyr and got connected to an agent in under 10 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU. Totally worth it for peace of mind on something this important.

While it's always good to be cautious, I think we need to clarify something here. There's an important distinction between different types of income: 1. Earned income (counts toward earnings limit): wages, salaries, bonuses, commissions, net earnings from self-employment 2. Unearned income (doesn't count toward earnings limit): interest, dividends, capital gains, pensions, annuities, and most importantly for this discussion - royalties from mineral rights when you're not involved in the operation Rental income is different from royalty income in some cases. If you're actively managing rental properties as a business, some of that income might be considered self-employment income. Passive royalties from mineral rights are generally considered unearned income. But you're right that consulting with a professional who understands both tax law and Social Security rules is the safest approach.

No, they don't take away all your benefits if you exceed the earnings limit. If you're under full retirement age for the entire year, SSA will deduct $1 from your benefits for each $2 you earn above the annual limit ($21,240 in 2025). For example, if you exceed the limit by $3,000, they would withhold $1,500 from your benefits. And in the year you reach full retirement age, the deduction is only $1 for every $3 you earn above a higher limit, and only for earnings in the months before your FRA month. It's also worth noting that these benefit reductions aren't truly "lost" - they're recalculated once you reach full retirement age to give you credit for the months when benefits were withheld.

glad u got answers! social security rules r confusing!!