His Old Jingle Started Paying Royalties After He Retired.
Social Security Treats It Differently From the Consulting Work He Does Now
Quick Read – Royalties from creative work completed before claiming Social Security may not count against the earnings test, unlike income from active consulting or new services. – The royalty exclusion isn’t automatic; beneficiaries must document copyright dates, licensing agreements, and proof of no meaningful new work performed after benefits began. – Royalties excluded from the Social Security earnings test can still be subject to federal income and self-employment tax, because the IRS and Social Security apply different rules. – Picture a retired advertising creative in his mid-60s. Years ago, he wrote a jingle for a regional bank, and the licensing checks still trickle in every quarter. He also picked up a two-day-a-week consulting gig helping a former agency polish pitch decks.
Both payments arrive on tax forms. He assumed Social Security would treat them the same way. It may not.