Penalties apply under the Social Security Act, if a beneficiary reports an event late,
and that event affects benefits under:
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•
the annual earnings test;
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•
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 their
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.