Social Security earnings limit reporting - monthly in first year but yearly after?

The first calendar year that you receive benefits before FRA is different than subsequent years. In your first year, SSA applies a monthly earnings test where you can earn up to $1,850/month (2025 amount) without affecting benefits, regardless of your annual total. This is called the Monthly Earnings Test. For 2026 and beyond, they'll switch to the Annual Earnings Test where they look at your total yearly income vs. the annual limit (about $22,200 for 2025). They'll typically send you an earnings estimate form at the beginning of each year asking for your YEARLY projection. So yes, it changes from monthly to annual after your first year collecting benefits. Hope this helps!

Hi there! I went through EXACTLY this last year. Yes, it's confusing! First year is monthly reporting (which honestly helped me because I could earn more during some months and nothing during others). But starting January 2026, they'll just look at your ANNUAL earnings. The SSA will probably send you an earnings estimate form in late December or early January asking what you expect to make for the ENTIRE 2026 year. If you think you'll go over the yearly limit (which will be around $23,000 in 2026), they'll withhold benefits accordingly throughout the year. One important thing: keep track of exactly when you hit FRA. Once you reach full retirement age, the earnings test goes away completely and you can earn unlimited income without affecting your SS benefits!

My wife had the same situation. In the 1st year they do monthly reporting which is a pain (make sure you keep copies of everything you submit). After that they just asked for yearly estimates. She ended up going back to work full-time and we had to pay back some benefits, but it all worked out.

They'll ask for yearly estimates after your first year receiving benefits (the first year they do monthly because of the grace year provision). Just be careful about your estimates - if you underestimate what you'll earn, you could end up with an overpayment notice and have to pay back benefits. If this happens, DON'T PANIC. You can request a payment plan. They may withhold future benefits to recoup the overpayment. I've had to call SSA multiple times about earnings reporting issues, and it's frustrating. They disconnect you after waiting for hours. I started using Claimyr (claimyr.com) to get through to an actual SSA agent without the wait. There's a video showing how it works at https://youtu.be/Z-BRbJw3puU - basically saves you from waiting on hold for hours. Wish I'd known about it sooner!

The monthly earnings test for your first year recieving benifets is actually helpful to many people because even if you exceed the annual limit, you can recieve full benifets for any month you don't earn over the monthly limit!! But yes, after first year they only look at annual earnings not monthly. Make sure your using the right earnings limit - for people in the year they reach FRA its much higher than for younger retirees!

THEY ARE CONSTANTLY CHANGING THE RULES!!!! i had to deal with this in 2023 and they made me report QUATERLY not monthly or yearly!!!! its all a mess and they will probably change it again by the time you need to report in 2026!!!!

Just went through this transition last year. First year is monthly (which they call your "grace year"), then it switches to annual. What nobody tells you is that you need to be proactive about updating them if your income situation changes during the year. I got a higher-paying part-time job mid-year and didn't think to notify them until my tax return showed much higher earnings than I'd estimated. Ended up with a $4,300 overpayment I had to deal with. Don't make my mistake!

One additional thing to note - make sure you understand what counts as "earnings" for the earnings test. It's generally only wages from employment or net earnings from self-employment. Things that DON'T count: pension payments, investment income, interest, annuities, capital gains, or insurance payments. This trips up a lot of people when estimating their earnings!

I'm in a similar situation - just started collecting at 62 last year and went through the monthly reporting for my first year. One thing I learned that might help you: if your accounting work is seasonal like you mentioned, the monthly test in your first year can actually work in your favor. During my slow months, I could earn almost nothing and still get full benefits, even though my busy season put me way over what the annual limit would have been. When I transitioned to annual reporting this year, I had to be much more careful about my total projected earnings. The key is being as accurate as possible with your estimate - I slightly overestimated to be safe rather than risk an overpayment situation. SSA has been pretty understanding when I've had to call with questions, though getting through can take forever as others mentioned. Also, since you're in accounting, you probably already know this, but make sure you're tracking your actual earnings throughout the year so you can update SSA if your situation changes significantly from your original estimate.

This is such a timely question! I just went through my first year of monthly reporting in 2024 and am now dealing with the switch to annual reporting for 2025. The monthly reporting in your first year is actually called the "grace period" and it can be really beneficial for people with seasonal income like yours. What I found helpful was keeping detailed records month by month during that first year - not just for SSA reporting, but also to get a good baseline for estimating my annual earnings going forward. Since your accounting work is seasonal, you might want to look at your earnings pattern from this first year to make a more accurate annual estimate for 2026. One tip: when they send you that annual estimate form (usually comes in late December or early January), err on the side of slightly overestimating rather than underestimating. I learned this the hard way when a client paid me more than expected in December and it threw off my projections. SSA is much more forgiving if you overestimate and they owe you money than if you underestimate and end up owing them! Also, keep all your monthly reporting documentation from this first year - it might be helpful reference material when you're making your annual projections.

I'm going through something very similar right now! Started collecting at 62 in February 2025 and also still working part-time. The monthly reporting for this first year has actually been working out well for me since my income varies quite a bit month to month. One thing I discovered that might help you - when you do switch to annual reporting next year, you can still contact SSA mid-year to update your earnings estimate if your situation changes significantly. I called them when I picked up some extra freelance work and they were able to adjust my projections without any issues. Since you're in accounting, you probably already have good record-keeping habits, but I'd suggest tracking not just your monthly earnings for SSA reporting, but also noting which months are your highest and lowest earning periods. This will make your 2026 annual estimate much more accurate when the time comes. The transition from monthly to annual reporting definitely feels like less paperwork, but as others have mentioned, being conservative with your annual estimate is key. Good luck with the rest of your first year reporting!

As someone who just went through this transition myself, I can confirm what others have said - the first year is monthly reporting, then it switches to annual. I started collecting in January 2024 at age 64 and had to do monthly reporting all of last year. One thing that really helped me with the seasonal income issue (I do tax prep work too!) was keeping a simple spreadsheet tracking my monthly earnings alongside the SSA forms. When it came time to estimate my 2025 annual earnings, I could see the clear pattern of my busy season vs. slow months. The annual reporting is definitely easier from a paperwork standpoint, but like everyone's mentioned, be conservative with your estimate. I slightly overestimated my 2025 earnings and would rather get a small refund than deal with an overpayment situation. Also, don't stress too much about the transition - SSA will send you clear instructions when it's time to switch to annual reporting. They're pretty good about walking you through the process, even if getting them on the phone can be challenging sometimes!