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posted Feb 27, 2025 4:00:33 PM

Social security calculation of withholding penalty when continuing to work after retirement

When continuing to work after retiring and less than full retirement age, is the social security withholding penalty ($1 for every $2) based on income before or after pre-tax deductions (HSA, 401K, healthcare premium)?

0 2 1904
2 Replies
Level 15
Feb 27, 2025 4:04:27 PM

Will this help?  See SS FAQ for working after retirement
https://www.ssa.gov/benefits/retirement/planner/whileworking.html

It says…
When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you're self-employed. We include bonuses, commissions, and vacation pay. We don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.

 

Expert Alumni
Feb 27, 2025 4:04:48 PM

It is based on earned income.

 

According to the SSA:
"When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you're self-employed. We include bonuses, commissions, and vacation pay. We don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits."

 

@T4Tigress