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lev-tax
lev-tax, Tax Advisor
Category: Social Security
Satisfied Customers: 29535
Experience:  Taxes, Immigration, Labor Relations
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I have a friend that was married over 10 years and got a

Customer Question

I have a friend that was married over 10 years and got a divorce. Her husband passed away and at the age of 60 or 61 she losed her job. She collected one month of his social security and then got a job. She called and canceled the social sercuity. Now she will turn 65 March 27th 2016 and she has called the social security office to now find out that since she had been paid one month survivor social security she's not elgible for his full social security at her age 66. She has never remarried and will be 66 next year. She was not told that she had to pay that one month back within that year. What is her options?
Submitted: 1 year ago.
Category: Social Security
Expert:  lev-tax replied 1 year ago.

If she want to have full benefits - it might be better to pay that one month of benefits back to the SSA.
That woudl not be large amount - and most likely will be more beneficial as her monthly benefits woudl be larger.

To be precise - we woudl need to calculate her benefits both ways and compare - but I woudl expect that will be most beneficial.
Then - we need to compare her own benefits and her benefits as a surviving spouse - so she would be eligible for larger.

As she is not at her full retirement age yet - she still may want to wait one more year - that woudl be reasonable if she is still working.

And finally as she will be 65 - I suggest to apply for Medicare regardless if she will start her social security benefits now or later.

Customer: replied 1 year ago.
Social security told her she could not pay it back now because it was not paid within that year that she took it.
Expert:  lev-tax replied 1 year ago.

Yes - that is correct - such decision should be made at the time she originally elected to suspend her benefits.
However please be aware that only her benefits as a surviving spouse woudl be reduced.
Benefits that she received when she was below 62 would not affect her own benefits.

So depending which benefits are larger - she might be entitled for full benefits based on her own working records.

Customer: replied 1 year ago.
She did not know and was not told anything about paying it back. Can see still draw survivor benefits even if it is less than hers so hers will grow until she is 70.
Expert:  lev-tax replied 1 year ago.

That would be possible if she apply before May 1, 2016 as the law recently changed.
If she apply after that date - that option is terminated.

Customer: replied 1 year ago.
When you say apply does that mean she has to start drawing his in May 2016 or just apply and draw when she is 66
Expert:  lev-tax replied 1 year ago.

If she will apply after May 2016 - she will not be able to draw survivor benefits and keep her own benefits to grow...

That option is eliminated by the new law which will be in full effect starting May, 1 2016.
That option is only available before that date.

Customer: replied 1 year ago.
She is still working and making 50k/yr, can she still apply for survivor benefit prior to May 2016 and keep hers growing until she is 70? And how would she be taxed on her pay and survivor benefit?
Expert:  lev-tax replied 1 year ago.

She may apply for survivor benefit only prior to May 2016 - that is OK.

However - because she is below her full retirement age - her benefits will be reduced.

There swill be additional reduction based on her earnings, and

85% of her actual social security benefits will be added to her taxable income and taxed based on her marginal tax rate.
So - if her employment status will not change - her actual benefits would be very minimal.
But otherwise - that is possible.