Effective Dates: 10/31/2024 - Present Previous | Next

TN 98 (10-24)

SI 00820.510 Student Earned Income Exclusion

A. Background

Effective 4/01/05, Section 432 of the Social Security Protection Act extended the Student Earned Income Exclusion (SEIE) to all individuals on a record who are working students under the age of 22, not just those who meet the SSI definition of a child. The SEIE will apply to earnings deemed from an ineligible spouse or parent(s) and it will apply to the joint earned income of eligible couples when both members are under age 22 and are working students.

B. Policy

1. General

The SEIE allows an individual who is under age 22 and regularly attending school to have earnings excluded from income as shown below:

For Year

Monthly Exclusion

Maximum exclusion for

calendar year

2025

$2,350

$9,460

2024

$2,290

$9,230

2023

$2,220

$8,950

2022

$2,040

$8,230

2021

$1,930

 $7,770

2020

$1,900

$7,670

2019

$1,870

$7,550

2018

$1,820

$7,350

2017

$1,790

$7,200

2016

$1,780

$7,180

2015

$1,780

$7,180

2014

$1,750

$7,060

2013

$1,730

$6,960

2012

$1,700

$6,840

2011

$1,640

$6,600

2010

$1,640

$6,600

2009

$1,640

$6,600

2008

$1,550

$6,240

2007

$1,510

$6,100

2006

$1,460

$5,910

2005

$1,410

$5,670

2004

$1,370

$5,520

2003

$1,340

$5,410

2002

$1,320

$5,340

2001

$1,290

$5,200

2000 and earlier

$ 400

$1,620

2. Qualifying for the SEIE

Effective 4/01/05

To qualify for this exclusion, an individual must be:

  • •

    under age 22; and

  • •

    a student regularly attending school per SI 00501.020C.

This exclusion may apply to an eligible or ineligible:

  • •

    individual,

  • •

    child,

  • •

    spouse, or

  • •

    parent(s)

3. School attendance and earnings

Develop and document school attendance per SI 00501.020.

Verify wages of a student even if they are alleged to be $65 or less per month.

4. Earnings received prior to month of eligibility

Earnings received prior to the month of eligibility do not count toward the yearly limit.

5. Application of the exclusion

Apply the exclusion:

  • •

    consecutively to months in which there is earned income until the maximum yearly exclusion is exhausted or the individual is no longer a student under age 22; and

  • •

    only to a student’s own earned income.

When preparing a Start Date record, consider the amount of the SEIE already applied on the prior terminated record and apply only the remaining SEIE to the newly established record.

6. Future increases

The monthly and yearly limits will be adjusted annually based on increases in the cost of living index. Under this calculation, these amounts will never be lower than the previous year's amounts. However, there may be years when no increases result from the calculation.

C. Procedure – student indicator

The student indicator (SY) advises the system that the SEIE applies. The student indicator recognizes student status for an eligible individual, and the system will build type B earned income for an eligible individual.

When an eligible individual under age 22 is a student, regardless of marital or head of household status, transmit the student indicator (SY) following normal procedures. See SM 01005.150, SM 01305.780, and MS 08114.069.

The SY does not recognize student status for ineligible deemors or members of eligible couples. The SEIE must be posted manually for these cases. See Section SI 00820.510E.

NOTE: The SEIE is an exclusion rather than a deduction; therefore, do not use the “deductions” screens in MSSICS to post the amount of the exclusion.

D. Procedure – eligible individual

When the student indicator is on a record, and the student also has earned income, the system will automatically post type B income of up to the monthly limit until the yearly limit is reached.

EXAMPLE: Jim Thayer, a student, starts working in June, 2005 at a local hardware store. They had no prior earnings during the year, and they have no unearned income. Jim earns $1600 a month in June, July, and August. In September, when they return to school, Jim continues working part- time. They earn $800 a month in September and October. Jim's countable income computation for June through October is as follows:

  • •

    June, July, and August

​ ​

$1600.00

- 1410.00

$  190.00

-     20.00

$  170.00

-     65.00

$  105.00

-     52.50

$    52.50

Gross earnings

Student exclusion

 

General income exclusion

 

Earned income exclusion

 

One-half remainder

Countable income

Jim has used up $4,230 of their $5,670 yearly student earned income exclusion ($1,410 in each of the three months).

  • •

    September

​ ​

$ 800.00

-  800.00

            0

Gross earnings

Student exclusion

Countable income

Jim has now used up $5,030 of their $5,670 yearly student earned income exclusion.

  • •

    October

​ ​

$ 800.00

-  640.00

 

$ 160.00

-    20.00

$ 140.00

-    65.00

$ 75.00

-    37.50

$   37.50

Gross earnings

Student exclusion remaining

($5,670 - $5,030 = $640)

 

General income exclusion

 

Earned income exclusion

 

one-half remainder

Countable income

Jim has exhausted their entire $5,670 yearly student earned income exclusion. The exclusion cannot be applied to any of Jim’s additional earnings during the 2005 calendar year.

E. Procedure - deemors and couples

When an ineligible parent, ineligible spouse or member of an eligible couple reports earnings, determine if that individual is under age 22 and a student. Follow normal procedures in SI 00501.020 to determine student status. If the individual qualifies for the SEIE, follow the procedures below.

NOTE: When an eligible individual and an ineligible spouse are both working students, use the SY field to apply the SEIE to the eligible individual and apply the SEIE to the ineligible spouse using manual deeming as shown in 1. below.

1. Ineligible deemors

If an ineligible spouse or one or both ineligible parents are working students, determine if the ineligible individual’s earnings are less than or equal to the SEIE in a month (provided the annual SEIE limit has not been reached). If earnings are less than the SEIE, then the SEIE is equal to the amount of the monthly earnings and there is no deemed income. Input a type V income amount of zero if there is no additional income to be deemed.

If earnings exceed the amount of the SEIE in a month, manually determine the amount of the exclusion and input the necessary amount of manually deemed (type V) income to correctly pay the case.

NOTE: If both deemor parents are students, both are working and both are under age 22, the SEIE applies only once to the combined earnings of the parents. The SEIE does not apply at all if one deemor parent is a non-working student and the other deemor parent works but is not a student. Both factors must be met for an individual for the SEIE to apply.

a. MSSICS cases

Always post gross wages or net earnings from self-employment (NESE) to avoid diaries and alerts aimed at identifying unreported or under-reported earned income, e.g., S2, K6 and K7 alerts. If consideration of the SEIE would result in a change in deemed income, the system will determine eligibility and compute payment based on manually deemed income. Posting the gross wages or NESE will not adversely affect this process.

Whether or not deeming is affected by the SEIE and whether or not monthly earnings exceed the monthly SEIE limit, document the SSR by accessing the SSR REMARKS (CRMK) screen. Identify the working student, the SEIE amount used for each month, the amount of SEIE left to use for future months, and your FO code.

Keep track of how much of the SEIE has been used for the year and how much is left by over-keying the remarks field when work is reported for subsequent months.

  • •

    If consideration of the SEIE would result in a change in the amount of deemed income, manual deeming will be required. Access the Input Claimant/Claimant Spouse Deeming (CDEM) screen via the Computation Menu (CPMN) to input the amount of type “V” unearned income. Be sure to consider all other applicable exclusions when computing manual deeming. In the field “ID BY PERIOD,” input “SEIEcons” to indicate that SEIE was considered, deeming was affected by it and that is the reason for the manual deemed income on the record.

  • •

    If consideration of the SEIE would not result in a change in the amount of deemed income, again access the CRMK and input “SEIE considered - no change to deemed income for MM/YY – MM/YY – FO ###.”

b. Non-MSSICS cases

Post the gross wages or NESE (without subtracting the SEIE) to the SSR and to the shared processes menu (EVID) per GN 00301.287.

Document the SSR Remarks to identify the working student, the SEIE amount used for each month, the amount of SEIE left to use for future months, and your FO code. Keep track of how much of the SEIE has been used for the year and how much is left by over-keying the remarks field when work is reported for subsequent months.

  • •

    If consideration of the SEIE would result in a change in the amount of deemed income, input the type “V” amount via UM field and show “SEIEcons” as the “CLAIM OR ID NO.” Also remember to post the gross wages or NESE via the EN field of the 1719B.

  • •

    If consideration of the SEIE would not result in a change to the amount of deemed income, input the gross wages or NESE via the EN field of the 1719B and also input the following via the SSR Remarks (R1-R5) fields: “SEIE considered - no change to deemed income for MM/YY – MM/YY – FO ###.”

Record the source of the evidence in EVID following existing procedures.

2. Eligible couples

If one or both members of an eligible couple are working students, compute the correct payment, taking into account the SEIE, and use the force pay/force due process. These cases will be controlled on the quarterly Force Pay/Force Flag/Force Due Listing (SM 01701.030).

When computing the correct payment, it is important to remember that:

  • •

    The SEIE applies only once to the combined earnings of the couple, even if both members of the couple are students and are working, and

  • •

    does not apply when one member of a couple is a non-working student and the other member of the couple works but is not a student.

Apply the SEIE to a couple in the order that is most advantageous to the members.

NOTE: The record does not need to be placed in force due if the combined monthly wages are $65.00 or less, since the system will exclude those wages. However, the record must be documented to show the amount of the SEIE used for those wages.

a. MSSICS example

DI and DS are both under age 22 and students. In June 2005, DI earns $900 and DS earns $600. Their combined income is $1,500. $1,500 - $1,410 (monthly SEIE) = $90.

All of DI’s income will be excluded under the SEIE. All of DS’s income will be excluded under the SEIE except $90.00. $600 - $90 = $510.

  • •

    Document the reason for the force due on a SSA-4904-U2.

  • •

    Post wages of $900 for DI on the MSSICS IWAG screen.

  • •

    Post wages of $600 for DS on the MSSICS IWAG screen.

  • •

    From the SSI Menu (MSSI) screen, access the Direct SSR Selection (USSR) screen and select the current SSR.

  • •

    On the Direct SSR Update Menu (UMEN) screen, select FORCE DUE AMOUNT/TERMINATE RECORD and on the Force Due Control (UFDC) screen, select FORCE DUE BEGIN DATE. This should be the first month for which the system cannot accurately compute payment or eligibility.

  • •

    On the Collect Force Due Amounts (UFDU) screen, over-key, if necessary, the Federal and/or State amounts propagated from the Computation History (CMPH) segment of the SSR with the correct payment amounts for each member of the couple.

  • •

    Access the CMRK screen. Input “SEIE for DI & DS - $1410 used in 6/05 - $4260 of yearly limit left – FO ###”.

  • •

    Keep track of how much of the SEIE has been used for the year and how much is left by over-keying the remarks field when work is reported for subsequent months.

b. Non-MSSICS example

Same facts as above. All of DI’s income is excluded under the SEIE. All except $90.00 of DS’s income is excluded under the SEIE.

  • •

    Post wages of $900 for DI via 1719B input.

  • •

    Post wages of $600 for DS via 1719B input.

  • •

    Post DI’s gross wages of $900 and DS’s gross wages of $600 to the shared processes menu (EVID).

  • •

    Input the following via the SSR Remarks (R1-R5) fields of the 1719B: “SEIE for DI & DS - $1410 used in 6/05 - $4260 of yearly limit left – FO ###.”

  • •

    Compute the correct payment, taking into account the SEIE and follow the force due procedures.

  • •

    Keep track of how much of the SEIE has been used for the year and how much is left by over-keying the remarks field when work is reported for subsequent months.

  • •

    Continue to post actual gross earnings in the shared processes menu when the case is non-MSSICS and the SEIE applies for one or both members of a couple.

F. References

  • •

    SI 00501.020D Definition of Student for Purposes of the SEIE

  • •

    SI 00830.455 Grants, Scholarships, Fellowships, and Gifts

  • •

    SI 00830.450 Educational Assistance - General

  • •

    SI 01320.185 Deeming Earned Income of an Ineligible Child Who is a Student

  • •

    SM 01305.780 SY Field – Student Indicator

  • •

    SM 01305.330 UM Entries Required for Deeming – Types V and I

  • •

    SM 01701.030 Force Pay/Force Flag/Force Due Listing

  • •

    MSOM BUSSR 002.003 Direct SSR Update Menu (UMEN)

  • •

    MSOM BUSSR 002.004 Force Due Control (UFDC)

  • •

    MSOM BUSSR 002.005 Collect Force Due Amounts (UFDU)

  • •

    MSOM MSSICSCOMPS 001.002 Computation Menu (CPMN)

  • •

    MSOM MSSICSCOMPS 001.010 Input Claimant/Claimant Spouse Manual Deeming (CDEM)

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0500820510
SI 00820.510 - Student Earned Income Exclusion - 10/31/2024
Batch run: 10/31/2024
Rev:10/31/2024