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

Good news - royalty payments are generally NOT counted toward the Social Security earnings limit. The earnings test only applies to wages from employment or net earnings from self-employment. Passive income like royalties, investment income, interest, pensions, annuities, and capital gains don't count against your limit. So your $15,000 from part-time work is the only income that would count toward your $21,240 annual limit. You're safely under the threshold based on what you've shared.

My brother gets royalties from some property in Oklahoma and he had to pay self-employment tax on it, so I think it DOES count for SS earnings. Better check with SSA directly to be sure.

u should call SSA directly and ask them!! i tried looking on ssa.gov and couldnt find a clear answer. better to hear it from them than random people online who might be wrong!!

Royalties don't count. I get royalty income plus pension plus social security and only my part time job counts toward earnings limit.

Be VERY careful with this!!! The rules are EXTREMELY complicated and if you make a mistake, SSA will come after you with an OVERPAYMENT notice years later!!! I had a similar situation with rental income and thought it didn't count, turned out some of it DID count because of how I reported it on my Schedule E. GET PROFESSIONAL ADVICE from someone who SPECIALIZES in Social Security, not just any tax preparer!!!

what happens if u do go over the limit? do they just take away all your benefits??

my friend gets royalties from a book she wrote and she said it doesnt count for ss earnings limit. probably same for oil?

Thanks everyone for the helpful responses! I feel much more comfortable now understanding that my oil royalties don't count toward the earnings test since they're passive income. I'll stick with my part-time job making $15K which keeps me well under the $21,240 limit. Really appreciate this community!

Just wanted to add some additional context for anyone else reading this thread. While royalties from mineral rights generally don't count toward the Social Security earnings limit, it's important to understand WHY this is the case. The earnings test specifically looks at income from "substantial gainful activity" - meaning work you actively perform. Passive royalties are considered unearned income because you're not providing ongoing services to earn them. However, if you're actively involved in managing the mineral extraction (like making operational decisions, negotiating contracts, etc.), that could potentially change the classification. Also worth noting: even though royalties don't count for the earnings test, they ARE still reportable income for tax purposes and may affect the taxation of your Social Security benefits depending on your total income level. So while you don't need to worry about benefit reduction due to the earnings test, you might still want to plan for potential tax implications. Glad you found clarity on this issue - it's definitely one of the more confusing aspects of Social Security rules!

Welcome to the community! I'm new here but wanted to share what I learned from my own experience with this exact situation. I also receive oil royalties from Texas properties and was worried about the earnings limit when I first started collecting Social Security at 62. After consulting with both a tax professional and calling SSA directly, I can confirm that passive royalty payments do NOT count toward the earnings test. The key word is "passive" - you're not actively working to generate this income, you're just receiving payments based on your ownership interest. However, I'd echo what others have said about getting professional advice if your situation is complex. In my case, I also discovered that while the royalties don't affect my earnings test, they did push me into a higher tax bracket for Social Security benefit taxation. So even though my benefits weren't reduced due to the earnings test, I ended up owing more in taxes overall. For your specific situation with $15K in part-time work income, you're definitely safe on the earnings test front. Just make sure to keep good records of all your income sources for tax planning purposes!

As someone new to this community and navigating Social Security for the first time, I really appreciate seeing this detailed discussion! I'm in a similar boat - just turned 62 and considering when to start benefits, but I also have some passive income streams that I wasn't sure about. Reading through everyone's responses has been incredibly helpful, especially the distinction between "earned" vs "unearned" income for the earnings test. It sounds like the key factor is whether you're actively working to generate the income or if it's truly passive. One thing I'm curious about - for those of you who have dealt with SSA directly on questions like this, do they provide written confirmation of their answers? I'm a bit paranoid about getting conflicting information from different representatives and want to make sure I have documentation if questions come up later. Thanks again to everyone who shared their experiences and knowledge here. This community seems like a great resource for navigating these complex rules!

Welcome to the community! As someone new here, I wanted to add another perspective on this important topic. I've been dealing with similar questions about passive income and Social Security benefits. One thing that might be helpful for future reference is that the Social Security Administration publishes an annual fact sheet about the earnings test that clearly lists what types of income count and don't count. For 2025, they specifically mention that royalties, along with other investment income, pensions, and annuities, are NOT counted toward the earnings limit. I'd also suggest keeping detailed records of your royalty payments and their source, just in case you ever need to provide documentation to SSA. Since these payments can vary significantly (as you mentioned, $800-1200 per quarter), having good records will help if any questions arise down the road. It sounds like you're in great shape with just your $15K part-time income counting toward the $21,240 limit. Enjoy those royalty payments without worrying about the earnings test - you've earned that peace of mind!

Welcome to the community! As a newcomer here, I wanted to chime in with some additional reassurance based on what I've learned from my own research into this topic. The consensus here is absolutely correct - passive royalty payments from mineral rights don't count toward the Social Security earnings test. I recently went through a similar concern when I started receiving dividends from some inherited stock, and after diving deep into the SSA regulations, I can confirm that the earnings test is very specifically focused on "earned income" from work activity. What I found particularly helpful was looking at SSA Publication No. 05-10069 "How Work Affects Your Benefits" which explicitly states that royalties, along with investment income, pensions, and other passive income sources, are excluded from the earnings test calculation. For your situation with $15K in part-time work income, you're sitting comfortably under the $21,240 annual limit with plenty of room to spare. The variability in your quarterly royalty payments ($800-1200) shouldn't cause any concern since they're not part of the calculation at all. It's great to see such a knowledgeable and helpful community here - the responses have been really thorough and accurate. Thanks everyone for creating such a supportive environment for navigating these complex Social Security rules!

Welcome to the community! As someone new here, I wanted to add my perspective on this important topic. I'm currently navigating similar Social Security questions as I approach retirement age. After reading through this excellent discussion, I'm impressed by how thoroughly everyone has covered the key points about passive vs. earned income for the earnings test. The distinction that royalties from mineral rights are considered "unearned income" and therefore don't count toward the $21,240 annual limit is crucial information. What I find particularly valuable is how multiple community members have emphasized the importance of getting official documentation and understanding the broader tax implications beyond just the earnings test. It's a great reminder that while the royalties won't affect your Social Security benefit reductions, they could still impact the taxation of those benefits depending on your total income. For Aaron and others in similar situations, it sounds like you can rest easy knowing your oil royalties won't jeopardize your Social Security benefits due to the earnings test. Your $15K part-time income keeps you well within the safe zone. Thanks to everyone who contributed to this thread - it's exactly the kind of detailed, helpful discussion that makes this community such a valuable resource for navigating these complex Social Security rules!

Welcome to the community! As a newcomer here, I wanted to share my appreciation for this incredibly thorough and helpful discussion. I'm in the early stages of planning my Social Security strategy and had similar concerns about various income sources. What really stands out to me is how this thread demonstrates the importance of understanding the specific definitions SSA uses. The key distinction between "earned income" (wages, self-employment) and "unearned income" (royalties, investments, pensions) for the earnings test is something I hadn't fully grasped before reading through everyone's responses. For others who might find this thread in the future, I think the main takeaways are: 1. Passive royalty payments from mineral rights don't count toward the Social Security earnings test 2. Only income from active work (wages, self-employment) counts toward the annual limit 3. While royalties don't affect benefit reductions, they may still impact the taxation of your SS benefits 4. Getting official documentation and keeping detailed records is always wise Aaron, it sounds like you're in great shape with your situation. Your part-time income of $15K is well under the $21,240 limit, and those Texas oil royalties won't affect your benefits at all. Thanks to everyone who contributed their knowledge and experience to create such a comprehensive resource on this topic!

Welcome to the community! As a newcomer here, I wanted to add my voice to this excellent discussion about oil royalties and Social Security earnings limits. I'm currently researching Social Security rules as I approach eligibility, and this thread has been incredibly educational. The consensus is crystal clear - passive royalty payments from mineral rights don't count toward the earnings test because they're classified as "unearned income" rather than income from active work. What I find particularly valuable is how this discussion has highlighted the importance of understanding the "why" behind these rules, not just the "what." The earnings test is specifically designed to measure income from substantial gainful activity - actual work you perform. Since royalty payments are based on ownership interest rather than labor, they fall outside this definition. For Aaron's specific situation, having $15K in part-time work income plus variable quarterly royalty payments of $800-1200, it's reassuring to know that only the $15K counts toward the $21,240 annual limit. That provides a comfortable safety margin. I also appreciate how community members have emphasized the broader considerations - while royalties don't trigger benefit reductions through the earnings test, they could still affect overall tax planning for Social Security benefit taxation. This is exactly the kind of thorough, supportive discussion that makes this community such a valuable resource. Thanks to everyone for sharing their knowledge and experiences!

Welcome to the community! As a newcomer here, I wanted to share how helpful this discussion has been for understanding Social Security earnings rules. I'm currently 61 and planning my retirement strategy, so seeing such a detailed conversation about passive income and the earnings test is incredibly valuable. What really strikes me about this thread is how it demonstrates that Social Security rules, while complex, do have clear logical frameworks once you understand the key distinctions. The difference between "earned income" from active work versus "unearned income" from investments, royalties, and other passive sources is fundamental to so many Social Security decisions. For anyone else reading this who might have similar concerns about various income sources, this discussion provides excellent guidance on both the specific rules and the importance of keeping good documentation. The emphasis on consulting official SSA publications and getting written confirmation when possible is practical advice that applies to many Social Security questions. Aaron, I'm glad you found the clarity you needed about your oil royalties. Your situation with $15K in part-time earnings keeping you well under the $21,240 limit, plus royalties that don't count at all, sounds like a great balance that maximizes your income while protecting your Social Security benefits. Thanks to all the experienced members who shared their knowledge and made this such a comprehensive resource!

Welcome to the community! As a newcomer here, I wanted to express my gratitude for such an incredibly thorough and educational discussion. I'm just starting to navigate Social Security planning myself, and this thread has been a masterclass in understanding the earnings test rules. What I find most valuable is how everyone has emphasized the core principle: the earnings test only applies to income from "substantial gainful activity" - actual work you perform. Passive royalties from mineral rights clearly fall outside this category since you're not actively working to generate that income. Aaron, your situation is a perfect example of how understanding these distinctions can provide real peace of mind. With your $15K part-time income well under the $21,240 limit and your oil royalties completely excluded from the calculation, you can confidently manage both income streams without worrying about benefit reductions. I'm also taking notes on the broader lessons shared here - the importance of keeping detailed records, consulting official SSA publications, and understanding that while royalties don't affect the earnings test, they may still impact overall tax planning for Social Security benefits. This community's combination of accurate information, real-world experience, and supportive guidance is exactly what I was hoping to find. Thank you all for creating such a valuable resource for those of us working through these complex Social Security decisions!

Welcome to the community! As a newcomer here, I'm really impressed by the depth and accuracy of this discussion about oil royalties and Social Security earnings limits. I'm currently 64 and just started collecting benefits myself, so this topic is very relevant to my situation. After reading through all the responses, I feel confident echoing what the experienced members have shared: passive royalty payments from mineral rights do NOT count toward the Social Security earnings test. The key distinction everyone has highlighted - that the earnings test only applies to income from "substantial gainful activity" or active work - is absolutely correct. Aaron, your situation sounds very similar to mine. I also receive quarterly royalty payments (mine are from natural gas wells in Pennsylvania), and I was initially concerned about how they might affect my benefits. After consulting with SSA directly and reviewing their official publications, I can confirm that these passive payments are classified as unearned income and completely excluded from the earnings limit calculation. What I'd add from my own experience is to make sure you keep excellent records of both your royalty payments and your part-time work income. Even though the royalties don't count for the earnings test, having clear documentation helps if you ever need to provide information to SSA or for tax planning purposes. You're in great shape with $15K in part-time earnings - that's comfortably under the $21,240 limit with room to spare. Enjoy those royalty payments without any worry about your Social Security benefits!