1813. Does the recipient of income determine whether the earnings count under the earnings test?

It does not matter who the final recipient of your income is when applying the earnings test. If the income is actual wages for services you perform or net earnings from self-employment, you must include the income when applying the earnings test. It also does not matter what you call your earnings: "dividends," "rent," "refund of loans," etc. We look closely at arrangements of this nature.

For example, Mr. Smith continues to perform services for a family, close corporation, trade, or business owned by him. Mr. Smith later transfers ownership to a relative. If Mr. Smith is receiving income, directly or indirectly, that is wages for the services or net earnings from self-employment, he must include that income in applying the earnings test.

Last Revised: Jan. 17, 2003