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PDtax, CPA firm owner
Category: Social Security
Satisfied Customers: 4666
Experience:  35 years tax and professional advice in all matters money
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We changed your monthly benefit to $2, 647.50 as of January

Customer Question

We changed your monthly benefit to $2, 647.50 as of January 2016. We found your prior amount was incorrect.
We changed your benefit amount to give you credit for your 2015 earnings. We did not include these earnings when we figured your benefit amount before.
You will receive $243 around 10/18/2016.
That is the money you are due through 9/2016.
We withheld $27 for voluntary Fed tax from this payment.
You will receive $2, 228.40 for 10/2016.
After that you will receive $2, 228.40 thereon.
That's a $400 cut for someone age 75 and planning on retirement!
Can they do this?
Any info you give would be more than appreciated.
Should you bill me for the info, I'd be pleased to pay you.
Thank you.
Submitted: 1 year ago.
Category: Social Security
Expert:  PDtax replied 1 year ago.

Welcome to the site. I'mCustomer and will be helping you today.

Expert:  PDtax replied 1 year ago.

How old is your benefit recipient, and when did he begin collecting benefits?

Customer: replied 1 year ago.
As noted, 75, and begun taking benefits at 65.
Expert:  PDtax replied 1 year ago.

There are a number of things that might impact your benefit this way.

Your 2015 income should not create a large decrease in benefits. It doesn't make sense.

One that might make sense is income tax withholding. Your $2647.50 benefit less 10% might be $2,382.75. If you pay for medicare, that might be an additional reduction.

I don't like letters without explanation, but those two items are my guess. After all, you received a catch up payment to compensate you for your 2015 earnings adjustment.

I would check my last annual statement from SSA, and verify my annual benefit and any subtractions for the prior year.

The only other thing I can think of is an IRS levy, which is available for income taxes in arrears, of 15%.

If neither of these items apply to you, then I am as dumbfounded as your CPA.

If I got it right, though, I would appreciate positive feedback to close out your inquiry. I'mCustomer