Does tax-exempt income under IRS Notice 2014-7 count toward Social Security earnings limit?

my sister works as a caregiver too and gets that same tax exempt money. she started SS at 62 last year and they only count her regular taxable wages for the limit. the IRS notice 2014-7 money doesnt count according to what her SS person told her. good luck!!

The earnings test for Social Security specifically looks at "earned income" - which is defined as wages, net earnings from self-employment, commissions, etc. The key factor here isn't whether the income is taxable, but whether it's considered earnings. For income under IRS Notice 2014-7 (which covers certain Medicaid waiver payments for care providers), it's excluded from gross income for tax purposes. However, Social Security generally counts money you receive for providing services as earnings - even if it's tax-exempt. I would recommend: 1. Get documentation from your employer separating out exactly which portion falls under the 2014-7 exemption 2. Ask for a formal written decision from SSA (not just a phone call) 3. Consider using Form SSA-795 to document your understanding based on what you're told This is definitely a specialized situation where getting the right answer in writing is important.

I thought ALL money u make counts toward the SS limit?? My brother in law got in BIG trouble cause he didn't report some side work and had to pay back a bunch of SS $$. Be careful!

I went through EXACTLY this situation last year! The key is getting everything documented clearly. For my situation (I care for my adult son through a Medicaid waiver program), SSA determined that my exempt income under Notice 2014-7 DID still count toward the earnings test. I had to reduce my hours to stay under the limit. The problem is that different SSA offices seem to interpret this differently. What worked for me was going in person to my local office and speaking with a Technical Expert, not just a regular claims rep. They have more specialized knowledge on unusual situations like this. This is definitely one of those frustrating gray areas in SSA policy where even their own employees give different answers.

Trying to get through to SSA is THE WORST!!! I spent 3 hours on hold last month just trying to ask a simple question about my benefits. Never even got through to anyone before the office closed. Their phone system is absolutely useless.

The whole system is set up to PUNISH people who try to work while collecting SS!!! Why should we be penalized for trying to stay active and contribute? I had to pay back $4200 last year because I went over the limit by just $1,800. The way they reduce benefits by $1 for every $2 over is robbery. And don't get me started on how they calculate it...total mess.

Just to clarify something important: There's a difference between how the IRS treats income and how SSA treats income for the earnings test. They're two separate government agencies with different rules. The earnings test looks at what SSA considers "earnings from work" - regardless of tax status. From what I've researched specifically on IRS Notice 2014-7 income: 1. This income is excluded from gross income for tax purposes 2. BUT it may still count as earnings for the Social Security earnings test 3. The determining factor is whether SSA considers it payment for current work performed There's a POMS section (SSA's internal rules) that addresses this, but it's complex. This is why getting a definitive ruling from a Technical Expert at SSA for your specific case is critical.

wait i just texted my sister to double check what i said earlier! she said it's more complicated than she first told me. the medicaid waiver payments DO count for the earnings test but DON'T count for calculating your benefit amount. sorry for the confusion! this stuff is so confusing even when you think you understand it :/

Thank you all for your responses! Based on everything shared here, it sounds like I should: 1. Assume my IRS Notice 2014-7 exempt income WILL likely count toward the earnings limit 2. Get documentation from my employer clearly showing which portions of my income fall under this exemption 3. Try to speak with a Technical Expert at SSA (not just a regular rep) 4. Get any determination in writing 5. Consider using Form SSA-795 to document my understanding I'm seriously reconsidering whether to claim now or just wait until my Full Retirement Age (66+8mo) when the earnings test no longer applies. Working and providing care for my family member is important to me, and I don't want to have to reduce those hours. Thank you all again for sharing your experiences and knowledge!