If the beneficiary has NESE only, prorate the net earnings (or loss) equally over
all months the beneficiary was engaged in self-employment (SE) to determine the monthly
income. Multiply the monthly income by the number of months prior to the month of
attainment.
EXAMPLE: Beneficiary's NESE for 2000 is $24,000 and the beneficiary is SE all months in the
year and the beneficiary became FRA in June. The amount of NESE subject to the ET
is $10,000 ($24,000 NESE divided by 12 months equal $2,000 x 5 months before FRA attainment,
January through May, equal $10,000.)
NOTE: When cents are involved divide the amount by 12, then drop the cents, then round
down before multiplying by the months before the beneficiary attains FRA.
Compute excess earnings as follows:
Earnings considered for ET are $10,000. Since the exempt amount is $17,000, the ET
does not apply. Beneficiary can receive full benefits for all months of 2000.