SSDI - Wages vs Income

[adjusterjack]

What is the name of your state? NY.

Asking for my sister in NYC who is up to her ears trying to cope with her health, finances, and the disaster that NYC is.

She is 62 and has been on SSDI since 2016 (about $2100 per month). She has been working limited duty (far below her former occupation), part time since 2018, within the Substantial Gainful Activity (SGA) limit ($1260 for 2020) and reports her wages monthly.

Her employer shut down the business a couple of weeks ago due to the Corona Virus. She qualified for unemployment compensation which is about $1450 per month) higher than her wages and above the SGA limit.

I have been scouring the internet and the SSA website and all I seem to be able to come up with is this:

For SSDI, you report wages.

For SSI, you report income and unearned income. Unearned income includes unemployment compensation.

Here's the question:

Do "wages" include UI? Or do you just report that you are no longer earning "wages" as of a certain date and do you not have to report the UI?

Yes, she will be calling the SSA tomorrow (I just brought this up to her today) but I'm not sure I would completely trust a phone call without seeing something authoritative from the government if anybody has a link to it.

Thanks in advance for your responses.

 

[Taxing Matters]

Do "wages" include UI? Or do you just report that you are no longer earning "wages" as of a certain date and do you not have to report the UI?

Unemployment compensation is not "wages" as defined by § 209 of the Social Security Act. As you can see reading that section, it does not lists unemployment comp in the list of payments that are considered wages.

 

[quincy]

Here is a link to 2019’s Tax Guide for Individuals, if you’re into reading:
https://www.irs.gov/pub/irs-pdf/p17.pdf

And here is a link to New York’s:
https://www.tax.ny.gov/pit/file/fullyear.htm

 

[commentator]

In past circumstances, no one was ever allowed to draw both U.I. and any form of social security disability money, as it was considered definitive proof you did not meet the guideline for A&A (able and available) which was one of the sacred pillars of the whole program. People who had received it, and then were later back paid for disability had to repay the unemployment insurance that they'd received. But since, in these times, the able and available thing may have been lifted in your state, I am without a clue as to how they will regard the income earned from unemployment benefits in regard to Social Security disability and taxes for someone on disability, as it has not happened before in any state that people were approved for benefits under these circumstances. New and uncharted waters here.

 

[adjusterjack]

People who had received it, and then were later back paid for disability had to repay the unemployment insurance that they'd received.

That's what I am looking for. Something written in the law that says that, even if it applied in the past.

So far, I'm not finding it.

I read Section 209 and agree that unemployment compensation is not part of the definition of "wages."

I also read Section 203 Reduction of Insurance Benefits and found no mention of unemployment compensation being reportable in the list of that which is required to be reported.

https://www.ssa.gov/OP_Home/ssact/title02/0203.htm#act-203-b-1

Comments?

 

[Taxing Matters]

Here is a link to 2019’s Tax Guide for Individuals, if you’re into reading:
https://www.irs.gov/pub/irs-pdf/p17.pdf

And here is a link to New York’s:
https://www.tax.ny.gov/pit/file/fullyear.htm

One has to be careful, however, as the definition of taxable wages for federal income tax and and what are wages for Social Security are slightly different.

 

[quincy]

One has to be careful, however, as the definition of taxable wages for federal income tax and and what are wages for Social Security are slightly different.

Also different will be how the state defines it.

 

[Taxing Matters]

Also different will be how the state defines it.

True, though for for Jack's SSDI question it is the Social Security definition that matters.

 

[adjusterjack]

My sister reports contact with SSA.

UI and the $600 is not reportable for SSDI.

 

[quincy]

My sister reports contact with SSA.

UI and the $600 is not reportable for SSDI.

That’s good news.

 

[Janke]

Think about it like this. In order to get wages, you have to get an employer to pay you for work you do for the employer that the employer decides is valuable, so they pay you do perform this service for them. In other words, you work. To get unemployment, you provide nothing of value to an employer. You get a check for doing nothing. That is not work. UI is not wages. It is not remuneration for work. It is remuneration for not working.

 

[Zigner]

Think about it like this. In order to get wages, you have to get an employer to pay you for work you do for the employer that the employer decides is valuable, so they pay you do perform this service for them. In other words, you work. To get unemployment, you provide nothing of value to an employer. You get a check for doing nothing. That is not work. UI is not wages. It is not remuneration for work. It is remuneration for not working.

UI is unemployment insurance. Ones work-effort is used to contribute to it. It's not simply a handout (excluding the $600/week that's happening now).

EDIT: The operative word is insurance. Your explanation of why it's not included is not correct, but it leads to the same conclusion.