Why Hasn't My Wife Received Any Social Security Credits?

Jul 3 2016 - 11:00am

My wife and I are self-employed and have been for 16 years. I just realized that on our Social Security earnings records all income has been credited to me and my wife has nothing, therefore she has no potential benefits other than through me. Upon calling the SSA I was told rather quickly that I need to amend my tax returns. I have always filed as married filing jointly and asked how I should be filing. They had no recommendations but to call the IRS, and they had no recommendations because they say they aren't allowed to give advice. I was told to contact a tax professional. It seems like this is either a simple mistake that I made in filing my returns for all of these years as I prepared them myself, or the SSA has made some sort of error. I'm at a loss and would welcome any feedback. Thanks so much! I was referred to you and told that you are the guru in this part of the financial world, so I hope that you have some input.

Hi,

Social Security credits for self-employment earnings come directly from Schedules SE of your federal tax return. Apparently, you've been reporting all of your and your wife's self-employment earnings on one Schedule SE each year, with only your Social Security number (SSN) listed at the top.

What you need to do from now on is include 2 separate Schedules SE on your federal tax returns, one for your wife showing her SSN, and one for you showing your own SSN. Schedule SE earnings are normally derived from Schedules C (non-farming) or F (farming), so you will also need to complete 2 of these schedules.

If the two of you are operating a single business jointly, you can still report your self-employment earnings separately for Social Security tax purposes using the instructions above. Be sure to follow IRS's rules for a qualified joint venture, as described here: https://www.irs.gov/businesses/small-businesses-self-employed/election-f.... Or, you can create a formal partnership and report your earnings separately under those rules.

As far as past years, you can file amended tax returns to separate your earnings as described above, but only for the past 3 years (i.e. 2013-2015). For earlier years, you and your wife will need to go to a Social Security office with copies of all of your tax returns, and explain to them in detail how your business was operated, who did what, etc. Then, they must make a determination as to whether or not you were effectively operating the business as a partnership. If they agree with you, they can divide the earnings and move your wife's share from your Social Security earnings record to your wife's record. Here are details from Social Security's operating manual, which you may want to print and take with you when you visit their office: https://secure.ssa.gov/apps10/poms.nsf/lnx/0301802334.

Best, Jerry