TN 21 (06-11)
Credit a QC based upon self-employment income (SEI) for any quarter after 1950 through
the last quarter of a taxable year (TY) that began before 1978, or the quarter of
death, if earlier, that an number holder had been credited with $100 or more SEI.
For a self-employed person to have SEI, his or her net earnings from SE for a TY must
have been at least $400. If a self-employed person has $400 or more of SEI for a TY,
credit them with four QCs for that year unless a short TY is involved. For possibility
of five QCs, see RS 00301.345B. Do not credit SEI to any part of a TY beginning before 1951.
Although SEI reports are annual, we credit SEI to calendar quarters to determine the
QCs. Allocate SEI as follows.
We credit SEI equally to each quarter of the calendar year.
Where the TY begins on a date other than January 1, or is less than a calendar year,
credit SEI equally to the calendar quarter in which the TY ends and to each of the
next three or fewer preceding quarters, any part of which is in the TY.
John Doe, an architect, reports SEI of $10,800 for the FY ending 03/31/1974. Allocate
the SEI as follows: 03/1974 - $2,700; 12/1973 - $2,700; 09/1973 - $2,700; 06/1973
Jane Doe’s TY began 09/01/1973, and ended at her death 01/03/1974. During that TY,
Ms. Doe received $10,900 in SEI. Allocate $3,600 to each of the calendar quarters
03/1974, 12/1973 and 09/1973.