Penalties apply under the Social Security Act, if a beneficiary reports an event late,
and that event affects benefits under:
the annual earnings test;
the child-in-care provisions.
A penalty applies when a beneficiary willfully and knowingly fails to report correct
earnings to SSA by the due date, in an effort to avoid deductions under the earnings
test. For example, a penalty applies when a self-employed beneficiary does not file
a self-employment (SE) tax return when required, or when a beneficiary defers his
or her wages, and fails to report this to SSA.
If the beneficiary has “good cause” for failure to report timely, the law states that
there is no penalty.