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Early Social Security Does Vacation/Sick Leave Count Towards 2020 Cap

Hello, if you are retiring from a job and taking early Social Security. Does unused vacation and sick leave a person accumulates count towards the 2020 cap of $18240? 

Thanks

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Honored Social Butterfly


@Babbs1235 wrote:

Hello, if you are retiring from a job and taking early Social Security. Does unused vacation and sick leave a person accumulates count towards the 2020 cap of $18240? 

Thanks


Yes - Unused Vacation and Sick leave counts as earned income because it is an employment benefit.

Rule of thumb - if the IRS considers income as earned, then so does the SSA.

IRS - taxable earned income 

 

Note page 4 of this SSA Publication:

SSA 2020 - How Work Affects Your Benefits 

 

Copy and Pasting the important stuff since this seems to be what you are asking about.

Special rule for the first year you retireSometimes people who retire in mid-year already have earned more than the annual earnings limit. That’s why there is a special rule that applies to earnings for one year,

usually the first year of retirement.

 

Under this rule, you can get a full Social Security check for any whole month you’re retired, regardless of your yearly earnings. In 2020, a person younger than full retirement age for the entire year is considered retired if monthly earnings are $1,520 or less.

 

read ALL of the above link ~

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Honored Social Butterfly

My payments did  in the year I retired but I believe when you reached 65  you can make as you want without penalty. Check with SSA to see what  applies to your circumstance.

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Silver Conversationalist

Are you getting paid for Vacation/Sick Leave days when you retire?

 

Have you visited and created an account on the Social Security web site? Be sure to read FAQs.

 

https://www.ssa.gov/

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