How does the 1 credit of Social Security work credits per quarter work for the self-employed?
For example, in 2023, you receive 1 credit for each $1,640 of earnings, up to the maximum of 4 credits per year. But if you are self-employed, you pay the self-employment tax only once when you file tax in April. Does it mean you only get 1 Social Security work credits per year?
If you are self-employed, you earn Social Security credits the same way employees do (1 credit for each $1,640 in net earnings, but no more than 4 credits per year). Special rules apply if you have net annual earnings of less than $400. For more information, read If You Are Self-Employed (Publication No. 05-10022).
So to receive the credits each quarter , must you also pay taxes quarterly?
So if the annual income divided by 4 is more than $1,640, then you get the 4 credits per year?
@oboero2 Each credit for Social Security requires that you earn at least $1640. So, $1640 = 1 credit; $3280 = 2 credits, $3920 = 3 credits; $6560 or more per year = 4 credits.
Q. So if the annual net* income divided by 4 is more than $1,640, then you get the 4 credits per year?
A. Yes.
*after expenses and the deduction for half the Self employment tax
From Social Security:
In 2023, you receive 1 credit for each $1,640 of earnings