Beginning after 1950, you can earn credits based on self-employment income earned in taxable years.
Before 1978, four credits were acquired for every taxable year at least $400 was earned in self-employment income.
Note: A self-employed person with actual net earnings of less than $400 may still be given credits if gross earnings were at least $600. He or she also must be eligible to use the "optional method" of reporting earnings. An individual that is not fully insured is considered to have a credit for each $400 of total wages during 1937-1950 if the person is fully insured based on credits derived under this method plus the credits earned after 1950.
Self-employment income, net earnings from self-employment, and the optional method available to figure net earnings are discussed in Chapter 12.)
After 1977, you acquire one credit for each designated amount of self-employment income (or self-employment income plus wages) wholly or partly in a taxable year. If you earn less than four credits, they will be assigned to your benefit. Self-employment income earned during any taxable year is assigned to calendar quarters in that taxable year as explained in §212.
Last Revised: Aug. 2, 2005
Social Security Handbook