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Social Security Credits Based On Self-employment
215.1 Can you earn credits on self-employment income?
Beginning after 1950, you can earn credits based on self-employment income earned in taxable years.
215.2 How are credits assigned on self-employment income earned before 1978?
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.)
215.3 How are credits assigned on self-employment income earned after 1977?
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
- Allocation of Self-Employment Income
- Earning Social Security Credits
- Social Security Credits Based On Wages Earned After 1936
- Optional Method of Computing Non-Farm Net Earnings
- Optional Method of Figuring Net Farm Earnings
- Social Security Handbook Index: Letter Q
- Self-Employment Tax
- Self-Employment Income
- When are wages and net earnings from self-employment counted?
- Net Earnings from Self-Employment
- Income of U.S. Citizen or Resident in Business Outside the U.S.
- When can earnings records be revised after the time limit?
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