Would The Proceeds Of A Settlement From My Former Employer Be Considered As Social Security Wages?

Jun 3 2019 - 11:59am

I am 68 and not collecting ss now, but I do work. Waiting until 70 to collect. I may have a settlement coming to me from my former employer. I know that the settlement is taxable. But are the proceeds considered social security wages?

Hi,

That depends on what type of compensation is involved in the settlement. Only earned income, specifically wages or net earnings from self-employment, is subject to Social Security taxes. If the settlement you receive from your former employer involves back wages for services that you performed, then the employer should issue you a W-2 form and withhold any required Social Security taxes.

Best, Jerry