TN 11 (09-87)
An individual is entitled to a quarter of coverage, except in a few instances, for each quarter within his taxable year if the total of his SEI and wages during the year equals the maximum.
The processing of fiscal year reporting of SEI sometimes results in less than the proper number of quarters being credited (i.e., where SEI is reduced below $400 because of the maximum of wages and SEI that may be credited).
The following example illustrates this situation:
Since we do not credit SE quarters of coverage where the amount of SEI to be credited is less than $400, the $100 SEI in the earlier taxable year in the example would be allocated as $50 for 1974 and $50 for 1975 without SE quarters of coverage.
The SEI for the later taxable year would be allocated as $7,050 for 1975 and $7,050 for 1976 with two quarters of SE coverage for each year.
NOTE: Since the fiscal year began in 1975, the $14,100 maximum applies.
Since the individual had no wages in the first two quarters of 1974, he would be short two quarters of coverage for 1974 under our method of processing fiscal-year SE reports.
He would also be credited with $7,000 below the maximum for 1975, even though he had far more than maximum net earnings for each taxable year.
He can receive credit only for the maximum for his taxable year, under the law, since he is not entitled to credit for any additional net earnings for 1975.
Quarters of coverage in fiscal year reportings for years 1978 and later are automatically allocated.
NOTE: Additional information on SEI quarters of coverage can be found in RS 01804.