Understanding Social Security Credit Time Limits

Did you know that self-employed individuals can earn social security credits? In fact, they can earn up to four within a given tax year. And, if they earn at least 40 by the time they retire, they can even be eligible for Social Security retirement benefits.   

These credits are based on your wages and earnings. You can get a credit for every $1,410 you earn, though, as mentioned, you can’t go over four credits a year, no matter how much you earn.

Remember, too, that, as a self-employed person, you’re in charge of filing your own taxes and reporting the credits you’ve earned.

A Time Limit You Need to Know

Those wonderful credits you earn don’t just sit around indefinitely waiting for you to claim them! Instead, like most things related to the IRS, there’s a time limit on how long you have to report the income and get the credits.

That limit is three years, three months, two weeks, and one day after December 31^st on the year you earned the income. That’s pretty specific, right? It’s so specific because, if you miss it, you miss it. The IRS won’t make exceptions, so make sure you don’t miss the deadline. Often, filing sooner rather than later is the smartest option for reducing your likelihood of forgetting to file.

Check Your Reported Earnings

As a final pro tip, be sure to set up an account on the Social Security Administration’s website. There, you’ll be able to view a full record of your earnings, and you can calculate how many credits you earned.

Also, check carefully to ensure your wages and earnings are correct. If they’re not and it’s costing you credits, be sure to report this issue and get your credits before the deadline runs out. Even in the case of an error, it still applies!

Ultimately, social security credits are a wonderful thing for the self-employed. But, it’s up to you to ensure you get what you’re due!