US Social Security May Exclude Royalties from Pre-Retirement Creative Work from Earnings Test, Unlike New Consulting Income
The US Social Security Administration (SSA) treats royalties from creative work completed before retirement differently from income earned from new consulting or services when applying the earnings test. Royalties from old work may not count against the earnings limit, which can prevent benefit reductions for those collecting Social Security before their full retirement age. However, beneficiaries must provide documentation, such as copyright dates and licensing agreements, to prove no significant new work was performed on the creative asset after benefits began. Notably, even if excluded from the Social Security earnings test, these royalties may still be subject to federal income and self-employment taxes, as the IRS and SSA apply different rules.
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