SSA logo: link to Social Security Online home1820. Number of Additional Benefits Lost for Failure to Report on Time

1820.1 What is the penalty deduction amount for failing to file the annual report on time?

The penalty deduction that may be imposed due to your failure to file the annual report of earnings on time is as follows:

  1. For the first time you fail to file the report, the amount of the penalty is equal to your monthly benefit rate for the last month you are entitled in the taxable year. However, if the work deduction is less than your full benefit for the month, the amount of the penalty equals the amount of the work deduction, but not less than $10;

  2. For the second time you fail to file the report, the amount of the penalty is two times your monthly benefit rate; and

  3. For the third and any subsequent time you fail to file the report, the amount of the penalty is three times your monthly benefit rate.

1820.2 Is there a maximum number of months that can be imposed for the penalty?

The number of months imposed for the penalty cannot be more than the number of months that work deductions are imposed for the year. The amount of the penalty is the same no matter how long you delay filing each report, whether for one month or one year after the due date.

A beneficiary with a monthly benefit rate of $136 has excess earnings of $190 for that year. This requires a loss of benefits in two months. Therefore, the maximum amount of the penalty is $272 (two times the monthly benefit rate) even if that year may have been the third year that the beneficiary failed to file the annual report on time.