Baby sitting income while on social security

Forum|Forum|2 years ago
July 19, 2023
1 reply
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I get social security income and in Medicare benefits. I also started baby sitting. If I get income over $40K, will I loose my Medicare status or social security income? I haven’t filed my return in few yrs, because I’m not required to file. (no taxable income). Will this change after my baby sitting income?

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xmasbaby0

Employee

You have not mentioned your age. You did mention Medicare--so can we assume you are at least 65? If you are deemed "full retirement age" your Social Security is not affected by receiving other income. If you are below full retirement age then if you earn over a certain amount, your SS benefits can be affected.

Before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2019 it was $17,640— for 2020 it was $18,240; for 2021 it was $18,960. For 2022 it was $19,560 — for 2023 $21,240)

No, your Medicare would not be affected by earning income while receiving Social Security.

Up to 85% of your Social Security benefits can be taxable on your federal tax return. There is no age limit for having to pay taxes on Social Security benefits if you have other sources of income along with the SS benefits. When you have other income such as earnings from continuing to work, investment income, pensions, etc. up to 85% of your SS can be taxable.

After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings; your employer will still have to withhold for Social Security and Medicare. If you work as an independent contractor then you will pay self-employment tax for Social Security and Medicare.

Many babysitters must report self-employment income---so you must consider that if you babysit in your own home. If you work in the home of the child(ren) that you babysit, then you may be a "household employee" for whom the employers are required to issue a W-2 and withhold tax and Social Security and Medicare. So we need more information about your plans and how you will babysit. And... is the babysitting for your own grandchildren--- or someone else's children? That also comes into play.

To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2022 Form 1040

https://ttlc.intuit.com/questions/1899144-is-my-social-security-income-taxable

https://www.irs.gov/help/ita/are-my-social-security-or-railroad-retirement-tier-i-benefits-taxable

You need to file a federal return if half your Social Security plus your other income is $25,000 when filing single or head of household, or $32,000 when filing married filing jointly, $0 if you are filing married filing separately.

Some additional information: There are 11 states that tax Social Security—Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, and Vermont These states offer varying degrees of income exemptions, but two mirror the federal tax schedule: MN and VT.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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stechAuthor

Employee

Sorry, forgot to mention she. I’m 69 and taking care of grandchildren. I wanted

verify, if I get paid will I lose my health care (Medicare), social security income or any other benefits I’m getting. It seem like won’t? Is there a limit? Like if I get $100k. I know household employer (son) would have to pay taxes etc.

is this possible to get one lump sum pay at year end? Or do they have to pay me monthly?

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xmasbaby0

Employee

@stech You are past "full retirement age" so your Social Security benefit amount cannot be reduced by the babysitting income. You have not explained whether you will babysit in your own home or the home of your grandchild. It does make a difference as to how the income is reported so please clarify that for us.

If you are going to babysit in YOUR own home, you are receiving self-employment income which must be reported as self-employment income. You will pay self-employment tax, and might need to pay estimated quarterly payments for that income. If you babysit in your grandchild's home, then you can be a W-2 employee and they can report your income on a W-2 and call you a household employee. But since you are the child's grandparent there is an exception made and they do not have to withhold FICA from your wages. However they should withhold ordinary federal (and maybe state) income tax from your pay.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**