Will SS take back earnings limit overage before or after tax filing? Went $500 over due to work stipend

The SSA typically withholds future payments to recover the overage once they're aware of it. They generally find out after you file your taxes, so expect the adjustment around mid-2025. For every $2 over the limit, they'll withhold $1 from your benefits. With $500 over, they'll withhold about $250, which they might take from one check or spread across several months. Keep in mind the annual earnings limit for 2024 was $22,320 if you're under full retirement age the entire year.

same thing happened to me last year but i went over by like $2k cause of overtime. they didn't take anything out until july!! was shocked when my check was suddenly $430 less that month with zero warning.

Make sure you understand that only earned income counts toward the limit. If you got any investment income, inheritance, pension payments, or other unearned income, that DOESN'T count toward the earnings test. Also, if you'll reach your Full Retirement Age (FRA) in 2025, different rules apply for the months before you hit FRA that year - the limit is much higher! Worth double-checking which situation applies to you.

I had the EXACT SAME SITUATION in 2023! Went over by about $700 because of a surprise bonus. SSA didn't take anything until August 2024 after I filed taxes. Then they just took it all from one check which was annoying because they took about $350. Would have been better if they spread it out!!!! No advance notice either just BAM smaller check one month.

After monitoring this for years with my clients, I've noticed Social Security typically processes these adjustments 3-5 months after tax filing. They receive earnings data from IRS, then calculate the overpayment. They should send a letter before withholding anything, explaining the amount and when it will be withheld. If you're concerned about the timing, you can be proactive and contact SSA directly to discuss a payment plan if the withholding would cause financial hardship. Unfortunately, reaching them by phone can be nearly impossible these days.

If you need to reach SSA by phone without waiting hours, I recently used a service called Claimyr that got me through to a real person in about 10 minutes instead of the usual 2+ hour wait. You can see how it works at https://youtu.be/Z-BRbJw3puU - it basically holds your place in line. I used it when I needed to sort out an overpayment issue similar to yours. Website is claimyr.com if you want to check it out.

The WHOLE SYSTEM is ridiculous!! Why should we be PENALIZED for working?? I'm still 3 years from FRA and have to watch every single penny I earn. Last October I had to TURN DOWN extra shifts because I was getting close to the limit. Meanwhile inflation keeps going up and up! And then they take MONTHS to tell you there's a problem and suddenly take a chunk of your check. Makes me FURIOUS how they treat seniors!!!!

One important thing to remember - in the year you reach your Full Retirement Age, the earnings limit disappears completely for the months after you reach FRA. And in that year before you reach FRA, the limit is much higher ($59,520 for 2024). So this problem isn't forever. Many people don't realize that once you hit FRA, you can earn unlimited income without any reduction in benefits.

my brother in law says just dont report the extra income lol but i wouldnt recommend that!! irs and ssa talk to each other now so they will find out eventually

Quick tip: keep documentation of all your earnings for the year. I've seen cases where SSA's calculation of overage didn't match what the person actually earned. Having your own records makes it easier to challenge any discrepancies. Also, if you're very close to the limit next year, you might want to talk to your employer about deferring any year-end bonuses to January of the following year.