TN 9 (05-90)

RS 02505.070 Determining if Services Are Substantial



  • The amount of time devoted to the trade or business. See RS 02505.075.

  • The nature of the services rendered.

  • Comparison of services before and after retirement.

  • The setting in which the services were performed.


Also consider:

Periods of Vacation, Sickness or Other Illness


    Consider the beneficiary as not rendering services if idle for those reasons.

Distinguish Ownership from SS

  • Ownership of an operating business is not controlling in establishing retirement.

  • Retirement does not require divestment of ownership.

  • Beneficiary may arrange affairs so as not to require SS in one or more months.

Distinguish Between Earnings and SS

  • There is not necessarily a connection between earnings from SE and SS.

  • Earnings from SE may come after the month services were rendered.

  • Earnings may represent profits based solely on investments or past services.

  • Services may be substantial in a month in which no income is realized.

  • Services may not be substantial in a month of substantial earnings.

  • Consider earnings to the extent that earnings from SE truly reflect the kind and amount of services rendered in a month.

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RS 02505.070 - Determining if Services Are Substantial - 08/13/1990
Batch run: 07/09/2013