20 CFR 404.435 - Excess earnings; months to which excess earnings can or cannot be charged; grace year defined.
(1) Were not entitled to a monthly benefit;
(3) Were at full retirement age (as described in § 404.409(a));
(5) Are age 18 or over and entitled to a child's insurance benefit based on disability;
(6) Are entitled to a widow's or widower's insurance benefit based on disability; or
(i) Do not work in self-employment (see paragraphs (c) and (d) of this section);
(b)Grace year defined.
(1) A beneficiary's initial grace year is the first taxable year in which the beneficiary has a non-service month (see paragraph (a)(7) of this section) in or after the month in which the beneficiary is entitled to a retirement, auxiliary, or survivor's benefit.
(2) A beneficiary may have another grace year each time his or her entitlement to one type of benefit ends and, after a break in entitlement of at least one month, the beneficiary becomes entitled to a different type of retirement or survivors benefit. The new grace year would then be the taxable year in which the first non-service month occurs after the break in entitlement.
(3) For purposes of determining whether a given year is a beneficiary's grace year, we will not count as a non-service month, a month that occurred while the beneficiary was entitled to disability benefits under section 223 of the Social Security Act or as a disabled widow, widower, or child under section 202.
(4) A beneficiary entitled to child's benefits, to spouse's benefits before age 62 (entitled only by reason of having a child in his or her care), or to mother's or father's benefits is entitled to a termination grace year in any year the beneficiary's entitlement to these types of benefits terminates. This provision does not apply if the termination is because of death or if the beneficiary is entitled to a Social Security benefit for the month following the month in which the entitlement ended. The beneficiary is entitled to a termination grace year in addition to any other grace year(s) available to him or her.
(c)You worked in self-employment. You are considered to have worked in self-employment in any month in which you performed substantial services (see § 404.446) in the operation of a trade or business (or in a combination of trades and businesses if there are more than one), as an owner or partner even though you had no earnings or net earnings resulting from your services during the month.
(d)Presumption regarding work in self-employment. You are presumed to have worked in self-employment in each month of your taxable year until you show to our satisfaction that in a particular month you did not perform substantial services (see § 404.446(c)) in any trades and businesses from which you derived your annual net income or loss (see § 404.429).
(e)Presumption regarding services for wages. You are presumed to have performed services in any month for wages (as defined in § 404.429) of more than the applicable monthly exempt amount in each month of the year, until you show to our satisfaction that you did not perform services for wages in that month that exceeded the monthly exempt amount.
- 20 CFR 404.446 — Definition of “substantial Services” and “services.”
- 20 CFR 404.434 — Excess Earnings; Method of Charging.
- 20 CFR 404.452 — Reports to Social Security Administration of Earnings; Wages; Net Earnings From Self-Employment.
- 20 CFR 404.430 — Monthly and Annual Exempt Amounts Defined; Excess Earnings Defined.