Writing as a full retirement age individual wondering about taxation of SS benefits. When the government calculates the income earned in order to decide whether social security benefits will be "taxed" or taken back at the $1 for ever $2 earned over $41,880, do they consider the social security benefit itself as being part of the $41K?

Hi,

I'm inferring that your question is about the Social Security earnings test, as opposed to income tax rules regarding the potential taxation of benefits (https://www.ssa.gov/planners/taxes.html).

The actual withholding amount is $1 for every $3 than a person turning age 66 in 2016 earns in excess of $41,880 (https://www.ssa.gov/planners/retire/whileworking2.html). And, only earnings in the months prior to the month the person attains age 66 counts toward the $41,880 exempt amount. The definition of 'earnings' for earnings test purposes includes only gross wages and net earnings from self employment. Social Security benefits themselves are not considered as earned income.

Best, Jerry