Can You Get Disability Benefits If You Were Self-Employed and had Self-employment Earnings?

You can get disability benefits if you are self employed or you are employed by an employer. While most people have their Social Security taxes withheld from their paychecks by their employers, self-employed people pay their Social Security taxes quarterly through estimated taxes, or annually through their income tax return.

It does not matter how you pay your Social Security taxes as far as the social security administration is concerned (though the IRS can impose penalties if you do not pay taxes quarterly) it just matters that you pay them.

Many self employed people have a hard time getting Social Security benefits because they declare no profit in their businesses; thus, they pay no Social Security taxes. If you do not pay any taxes, you cannot get Social Security Disability benefits. It is advisable to declare some profit and pay taxes rather than offset all of your self-employment earnings with expenses.

Unfortunately, those who actually make no profit find themselves in the same predicament with Social Security.

Self employed individuals can earn one work credit per quarter provided their net self employment is equal to, or more than, the amount set by Social Security for a quarter of coverage.

Usually, the amounted needed to earn a quarter of coverage changes each year. You can earn a maximum of four quarters of coverage per year. If you earn enough work credits or quarters of coverage you can get Social Security Disability. Remember, earning your quarterly work credits insures you for Social Security Disability. But the amount of your disability benefits depends upon how much money you declare as profit.

As a self-employed person, your net self-employment earnings are reported to your Social Security earnings record rather than your gross earnings. Higher net self-employment earnings generally result in higher monthly Social Security Disability benefits.

What if you have not earned enough quarters of coverage or work credits through your self-employment to be covered or insured by Social Security Disability? If you are not insured for Social Security Disability, you may still qualify for SSI, or Supplemental Security Income disability.

The SSI disability program is a need based disability program that is not dependeant upon your earnings record. It does, however, require you to meet income and resource limits like other need-based social programs.

Related: SSDI and self-employment earnings from a business.

About the Author: Tim Moore is a former Social Security Disability Examiner in North Carolina, has been interviewed by the NY Times and the LA Times on the disability system, and is an Accredited Disability Representative (ADR) in North Carolina. For assistance on a disability application or Appeal in NC, click here.

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