working while on social security

[LaurenceG159369]

 I understand that if I am on social security and under the full retirement age, then if I work and earn more than approximately $21,000 then for every 2 dollars earned they deduct a dollar. I was curious when do they deduct that amount ? Does it happen when you file taxes for the year ? I have not seen it mentioned how they figure this out or when it happens. Do they just watch the taxes filed by your employer ? 

[GailL1]

I am sure you are looking for a simple answer on the logistics of the matter.  When has the government ever done anything simple.

Congressional Research Service.gov 05/10/2023 - Social Security Retirement Earnings Test: How Earnin... 

SSA.gov - POMS - Earnings Test

Make sure you also read the Referenced POMS links for figuring it 

Yes, the data all comes from the employer at the end of each year - your employer submits a copy of W2 to the SSA (Social Security Administration) with your SS # and then the SSA runs this against your benefits and makes adjustment both plus and minus.

Same thing for the self employed but the data comes from tax return SCH SE.

Plus and minus because when you hit FRA and the RET (Retirement Earnings Test) is no longer applicable then you have still added to your benefit during those years when the RET was applicable - so at FRA, you get a few dollars more in your benefit.

This all takes time since the government does not work in real time.  So normally, the adjustment (plus / minus) takes into the year or even the following year - depending on the processing source and timing.