Social Security retirement benefits with S-corp income under earnings limit - can I stop/start payments?

I dealt with this exact situation! As an S-corp owner, Social Security looks at your W-2 wages from the business, NOT your business profit. They care about earned income that you pay FICA taxes on. Your Schedule C won't apply since you're not a sole proprietor - they'll want to see your W-2 from your corporation. And yes, you can absolutely suspend benefits if work picks up! I had to do this twice when unexpected projects came in. Just call SSA as soon as you know your income might exceed the limit. You can restart payments later by submitting a simple form. The SSA website doesn't explain this well at all for business owners.

Just to clarify some confusion here - for S corporations, Social Security ONLY counts your W-2 wages toward the earnings test, NOT your business profits that flow through on your K-1. If your W-2 income is $12,000, that's all that counts toward the earnings limit, regardless of how profitable your business is. And regarding your 2026 question - yes, you only need to stay under the higher limit for January-March. Once you hit FRA in April, you can earn unlimited income with no reduction in benefits. Make sure you notify SSA about your birthday month so they apply the right rules.

my wife has s-corp too and we learned this the hard way! SS only looks at w2 part, not the profits. you should be fine with 12k salary. just make sure its "reasonable" so irs doesnt get mad lol

Everyone giving you incorrect info here!!! The earnings test for self-employed people includes BOTH your net earnings AND any substantial work you perform in your business. Even if you only pay yourself $12K, if you work more than 45 hours per month in the business, SSA can deem you to be earning over the limit regardless of your actual pay! Look up "substantial services" on the SSA website. They don't make this obvious and many people get hit with overpayment notices later!!

I tried suspending and restarting my benefits when my consulting work fluctuated, and it was a NIGHTMARE dealing with Social Security. I spent HOURS on hold just trying to reach someone. When I finally did, they gave me conflicting information each time. Eventually I just kept my benefits suspended until I reached FRA rather than dealing with their bureaucracy repeatedly.

To address the concern about "substantial services" - this primarily applies to the first year of retirement. After that, the monthly earnings test is typically what matters. But it's true that SSA does have this provision that can deem you over the earnings limit based on your work activity regardless of income. I recommend keeping a detailed log of your work hours (a simple spreadsheet works) in case you're ever questioned. And if you do need to suspend/restart benefits, giving SSA advance notice is critical, not after-the-fact. Regarding your FRA in April 2026 - one strategy to consider is intentionally limiting both your hours and income in January-March 2026, then expanding your work efforts after reaching FRA.

what ever u do DONT trust that the ssa computer systems talk to each other properly!! my dads retirement got messed up cause the ssa didnt properly record his income and he got hit with massive overpayment notice!! keep all your tax returns and w2s for at least 3 years! ssa is running on computer systems from the 1980s i swear

To answer your question about documentation - when I was collecting SS with my S-corp, they wanted copies of my W-2, business tax return (1120S), and personal return (1040). They seemed particularly interested in verifying that my S-corp salary was being properly reported. I just realized I never addressed your question about restarting benefits! Yes, there's a form called "Request for Reinstatement of Benefits" (not sure of the exact number). The process took about 3-4 weeks for me. The tricky part is accurately predicting your income for the rest of the year - you really have to stay on top of your projections month by month.

Regarding the automatic adjustment at FRA - the SSA should automatically stop applying the earnings test when you reach FRA, but it's always good practice to confirm this has happened. I recommend checking your my Social Security account online about a month after your birthday to verify your payment amount has adjusted correctly. As for documentation - typically they'll request verification in the first year, and then randomly in future years. The randomness is part of their compliance process. But even in years they don't request documentation, you're still legally required to report if you exceed the limit. Remember that the 2026 earnings limit will be pro-rated for your pre-FRA months. If the annual limit is around $60,000 (estimated for 2026), your January-March limit would be approximately $15,000 (1/4 of the annual amount).

One thing I haven't seen mentioned here is the importance of understanding how SSA treats distributions vs. salary for S-corps. While everyone is correct that only your W-2 wages count toward the earnings test, you still need to be careful about taking "unreasonably low" salary compared to distributions - the IRS has guidelines about reasonable compensation for S-corp owners. Also, regarding the suspension/restart process - I found it helpful to request written confirmation whenever I made changes to my benefits. SSA phone representatives sometimes give different information, so having documentation of what was agreed upon saved me headaches later. You can also make some of these requests through your my Social Security account online, which creates an automatic paper trail. Your plan sounds solid, Ava! Just make sure when you do restart benefits after any suspension that you double-check your first payment reflects the correct amount. I've heard of cases where the restart didn't process correctly and people had to follow up multiple times.

Just wanted to add another perspective on the S-corp earnings test situation. I've been collecting SS benefits with my S-corp for 3 years now, and one thing that caught me off guard was how SSA handles estimated quarterly payments. Even though only your W-2 wages count toward the earnings test, if you're making quarterly estimated tax payments on significant business income, they sometimes flag your account for review. I learned to keep a simple one-page summary ready that shows: 1) My annual W-2 wages from the S-corp, 2) My quarterly salary payments, and 3) A note explaining that business profits are distributions, not wages subject to FICA. This has saved me time during their random compliance checks. Also, regarding your 2026 strategy - consider that if you do need to suspend benefits early in the year, you might want to time it so that you can restart before April when you hit FRA. That way you don't miss out on those final months of benefits before the earnings test disappears completely. The restart process usually takes 3-4 weeks, so plan accordingly if you think you might need to do this.