Social Security income reporting confusion - do vacation/sick payouts count for 2024 earnings limit?

Great question. For Social Security earnings test purposes, income counts when it's PAID, not when it was earned or accrued. So even though your vacation/sick time was earned in 2023, if it was paid out in January 2024, it counts toward your 2024 earnings limit. This is a common area of confusion! You don't need a special form to report this - the SSA will see it on your W-2. But you should contact SSA directly to let them know your expected earnings for 2024 to avoid any surprise overpayment notices later.

This happened to me lastyear! The income counts when u get paid not when u earned it. Thats how SSA works. So yep ur January 2024 sick/vacation payout counts as 2024 income even if its for 2023 work. Sorry.

Wrong!!! My brother got his vacation payout and it DIDNT count to his earnings limit because it was earned BEFORE he started SS!!! You need to talk to a supervisor at SSA not the first person who answers. They got special rules for vacation pay.

I dealt with this exact situation when I retired in 2022. Unfortunately, income counts for the year in which it's paid, not when it was earned. So your January 2024 payouts will count toward your 2024 earnings limit, even though you earned the sick/vacation time in 2023. Here's what I recommend: 1. Calculate exactly how much you can earn for the rest of 2024 without exceeding the limit ($22,320 minus your January payout) 2. Keep very careful track of your earnings throughout the year 3. If you're getting close to the limit, talk to your employer about postponing any end-of-year bonuses or payments to January 2025 Also, remember that once you reach full retirement age, the earnings limit no longer applies.

Have you tried calling SS to ask about this? I spent THREE DAYS trying to get through to someone at Social Security last month for a similar question. Kept getting busy signals or disconnected after waiting for an hour!! So frustrating! When I finally reached someone they gave me conflicting info from what their website said.

my brother inlaw works for the SSA and says its all about WHEN U GET PAID not when u earned it. he says SSA doesnt care about 2023 vs 2024 they only care when the money hit ur bank account. sucks but thats gov for ya!!!!!

One more important point - since you started benefits in February 2024, you may qualify for a "first year rule" special calculation. In your first year receiving benefits, SSA only counts earnings in months AFTER you started benefits. But sadly, since your payout was in January (before your February start), it will still count toward your annual limit. Just something to be aware of for future reference.

I just thought of somthing! Are u SURE the payout will be on ur W2 for 2024? Maybe check ur last paystub from 2023 to see if they included it there? Sometimes employers do weird things with vacation payouts. Worth checking!

This is why I HATE the earnings limit rules!!! So complicated and they PUNISH people for working. I had to turn down a part-time job last year because it would have put me over the limit by just $500 and I would have lost WAY more in benefits. The whole system needs to be fixed!!!!!

I think u should just call ur local office and ask. Every situation is different and maybe yours will qualify for an exception. My friend said her severance pay didn't count toward her limit even tho it was paid after she started SS.