Do gas royalties count as earned income when receiving SS at 62

Do royalties count as income when getting SS at 62

Yes, income is income regardless of the source.

Oil and gas royalties are not earned income. You receive a 1099-MISC and you report the royalty income on Schedule E. If you own a working interest, then that income will be reported on 1099-NEC and that is earned income to be reported on Schedule C.


So, I just ask my financial advisor this Thursday. He said to ask our tax guy for clarification. I want to know this also. Are y’all saying no? So if I claim SS, they will not take away a dollar for every two dollars that oil and gas royalties cause me to go over the max earned income allowed? That would be a game changer for me. I get conflicting answers for everyone I ask on this. I agree that it is not earned income. I did not work for it.

Your SS benefit will not be reduced at all from gas and oil royalty income and does not count towards the max earned income limit. This is always the case. However, the royalty income may cause the SS benefits to be taxable income (up to 85% of the benefits). The earned income limit applies to wages and self-employment income only.


@Jeffrey_Yourkovich_CPA Thank you so much for an answer from a CPA. I’m ecstatic to know this …

I thought both capital gains and royalty income are included in MODIFIED Adjusted Gross Income when SS premiums are calculated.

My understanding is that only earned wages are counted. Dividends and passive income don’t impact / cause SS Penalties. But research further

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