Do you have to report an EEOC settlement to Social Security if you get disability benefits?

My question is if you receive a settlement from Equal Employment Opportunity Commission awarded by a judge for damages, will this settlement need to be reported to Social Security Disability as earned income? Thank you.

If you are receiving Social Security Disability (title II benefits, which is an entitlement gained through your work activity and earned work credits) it does not matter what settlement you receive. SSD has no income or resource limits, meaning that it is no affected at all by your assets. Assets can include liquid assets held in banking accounts, of course.

As for earned income, I can see no way that it would be reported as earned income. If it is, you can go to your local Social Security office and they can correct it. However, it may be considered some type of income for IRS purposes; you would have to ask your tax person. I think you should be fine with Social Security.

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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