TN 21 (06-11)

RS 00301.345 Gift Quarters of Coverage (QC)

A. Introduction to gift QCs

If a number holder (NH) has maximum creditable earnings in a year, all quarters in that year are QCs. Where this occurs, quarters that would not otherwise be QCs, are gift QCs.

NOTE: This policy applies for years prior to 1978. For the policy about how we credit quarters of coverage after 1977, see “Quarters of Coverage” in RS 00301.200.

B. Operating policy for gift QCs

1. Wages

All quarters in the calendar year are QCs where a person has wages of:


Calendar Year

$ 3,000

1937 thru 1950

$ 3,600

1951 thru 1954

$ 4,200

1955 thru 1958

$ 4,800

1959 thru 1965

$ 6,600

1966 thru 1967

$ 7,800

1968 thru 1971

$ 9,000












2. Self-employment income (SEI) or SEI-wages combination

All quarters in the taxable year (TY) are QCs if a person has SEI or combined SEI and wages of:

  1. $3,600 in a TY beginning after 1950 and ending before 1955;

  2. $4,200 in a TY ending after 1954 and before 1959;

  3. $4,800 in a TY ending after 1958 and before 1966;

  4. $6,600 in a TY ending after 1965 and before 1968;

  5. $7,800 in a TY ending after 1967 and before 1972;

  6. $9,000 in a TY beginning after 1971 and before 1973;

  7. $10,800 in a TY beginning after 1972 and before 1974;

  8. $13,200 in a TY beginning after 1973 and before 1975;

  9. $14,100 in a TY beginning after 1975 and before 1975;

  10. $15,300 in a TY beginning after 1975 and before 1977; and

  11. $16,500 in a TY beginning after 1976 and before 1978.

Beginning after 1974, if a NH has combined wages and SEI totaling an amount equal to the contribution and benefit base in effect for any such year, each quarter, any part of which falls in the TY, is a QC.

A NH who has maximum SEI, or SEI and wages in a taxable fiscal year (FY) covering parts of five calendar quarters will be granted as many as five QCs; although the SEI for computation purposes will be allocated to only four calendar quarters.

C. Examples

1. FY (four QC)

John Doe is paid $2,700 in wages in the third quarter of 1973. He derives net earnings (NE) from SE of $10,600 in the FY ending 06/30/1974. Only $8,100 of the $10,600 meets the definition of SEI in this situation. He has $10,800 in combined wages and SEI for the four-quarter TY. Mr. Doe is credited two QCs in 1973 and two in 1974.

2. FY (five QC)

Jane Doe derives SEI of $10,800 in the FY ending 05/31/1974. She had no other creditable earnings during 1973 and 1974. Ms. Doe gets five QCs including one for the second quarter of 1973 since part of such quarter falls within the TY and since he received the maximum creditable SEI in the TY.

3. Combined SEI-wages

John Q. Public derives SEI of $10,620 in the FY ending 05/31/1974. His earnings record shows wages of $180 in the second calendar quarter of 1974. He had no other income in 1973 and 1974. Mr. Public’s tax return showed that he had $10,800 in NE from his business in the TY mentioned, but in reporting his SEI had correctly deducted $180 wages paid in 05/1974 from his total taxable SEI. Mr. Public gets five