deferred compensation, FUCA and SSDI

sethness · ‎October 23, 2025

I have been disabled, not working and on SSDI since 2020.

For 2024, I began receiving payments from a non account balance non qualified deferred compensation plan/excess pension plan. My former employer applied the FICA tax special timing rule and paid FICA taxes (using my future benefits) on the full present value of the excess pension benefit.

This present value was reported on Box 3 of a W2. (box 1 has the actual benefit I received, plus the amount used to pay the fica taxes and fed ta and state taxes and is much lower then box 3)

I just was notified from SSA that my SSDI benefit is increased due to the earnings in this box 3.

Are SSDI benefits supposed to be increased by "earnings" after disability begins? especially when these earnings are actually an accounting fiction?

what about by the box 1 amount, which I believe is what is called a "special payment"?

and finally, will any of this be counted as SGA and affect my eligibility?

AmeliesUncle

@sethness wrote:
Are SSDI benefits supposed to be increased by "earnings" after disability begins?

what about by the box 1 amount, which I believe is what is called a "special payment"?

and finally, will any of this be counted as SGA and affect my eligibility?

If you are adding income to your Social Security base, I don't see why it can't be increased.

I'm not sure what you are asking about Box 1.

It shouldn't because you didn't work, but I suspect the automated computers will trigger something because they THINK you had that income due to working. You may need to contact the Social Security Administration about it.