TN 8 (02-17)
GN 05002.007 Early Delivery of the January 3 Recurring Payment
Section 708(c) of the Social Security Act
A. Policy for treatment of prior year payments
When the January 3 check delivery date falls on a non-banking day and the first previous banking day is in the previous year, we deliver the January benefit check in December. However, for taxation of benefits purposes, the check for January 3 that we issued in late December is treated as if we issued it in the year associated with the intended January 3 delivery date.
This treatment is directed by Section 86(d)(5) of the Internal Revenue Code.
B. Example of a prior year payment applying to the current tax year
January 3, 2016 is a Sunday and the 1st is a Federal holiday. As a result, the first banking day before the 3rd is December 31, 2015. Therefore, beneficiaries in Payment Cycle 1 receive a 13th payment in 2015. However, for tax purposes, the check issued December 31 is treated as if issued in 2016, i.e., the current tax year.