T-bill interest is exempt from Social Security earnings test
The Social Security retirement earnings test applies to anyone who claims before Full Retirement Age. In 2026, the test only counts wages and self-employment income above $23,400.
T-bill interest does count toward IRS provisional income, potentially making up to 85% of Social Security benefits federally taxable above $34,000.
Using I bonds, Roth withdrawals, or high-basis accounts can reduce taxable interest and keep provisional income below the 85% threshold.
This distinction is crucial for individuals who have filed for Social Security early and earn income from T-bills, as it can impact their benefit amount.