J, a druggist, became entitled to social security retirement benefits effective October, 1965, when he reached age 65.

In 1960, J operated a drugstore from January through July. The store was not profitable and J sold it at a loss of $2,260.

From July through December of that year, J worked a job in which he earned $3,120 for the rest of the year.

The question was whether work deductions should be imposed against J’s net earnings that year.

Work deductions are not imposed after age 72. In the year at issue, work deductions were imposed against benefits if the individual earned more than $1,200 for the year.

It was held that J’s earnings for the latter half of the year should be offset with the net loss from self-employment from the sale of the drugstore. Thus, J’s net earnings for the year were $860 ($3,120 in wages minus the $2,260 loss). Because this amount was less than $$1,200, no work deductions were imposed.

See Social Security Ruling (SSR) 61-57.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.