1803.Annual Exempt Amounts
1803.1How is the annual exempt amount determined?
There is an annual exempt amount prior to year of FRA (see §723.5) attainment. In the year you reach FRA, you are subject to a different annual exempt amount. The exempt amounts may change from year to year to take into account the change in the national average wage index. The exempt amounts are computed each year according to the formula provided in the Social Security Act. This formula takes into account increases in national earnings levels.
1803.2What are the annual exempt amounts?
The chart below shows the annual exempt amounts for the years 1985 through 2011:
Year | Age 65-69 | Under Age 65 |
|---|---|---|
1985 | $7,320 | $5,400 |
1986 | $7,800 | $5,760 |
1987 | $8,160 | $6,000 |
1988 | $8,400 | $6,120 |
1989 | $8,880 | $6,480 |
1990 | $9,360 | $6,840 |
1991 | $9,720 | $7,080 |
1992 | $10,200 | $7,440 |
1993 | $10,560 | $7,680 |
1994 | $11,160 | $8,040 |
1995 | $11,280 | $8,160 |
1996 | $12,500 | $8,280 |
1997 | $13,500 | $8,640 |
1998 | $14,500 | $9,120 |
1999 | $15,500 | $9,600 |
Year of Full Retirement Age | Prior to Year of Full Retirement Age | |
2000 | $17,000 | $10,080 |
2001 | $25,000 | $10,680 |
2002 | $30,000 | $11,280 |
2003 | $30,720 | $11,520 |
2004 | $31,080 | $11,640 |
2005 | $31,800 | $12,000 |
2006 | $33,240 | $12,480 |
2007 | $34,440 | $12,960 |
2008 | $36,120 | $13,560 |
2009 | $37,680 | $14,160 |
2010 | $37,680 | $14,160 |
2011 | $37,680 | $14,160 |
1803.3How do you know which exempt amount applies?
The higher exempt amount applies if you reach full retirement age (65 and 2 months in 2003) (see §723.5) on or before the last day of the taxable year involved. The lower exempt amount applies if you do not turn full retirement age on or before the last day of the taxable year.
Dr. James, who reports his earnings on a calendar year basis, turns age 65 and 2 months on June 18, 2003. The lower exempt amount ($11,280) applies for calendar year 2002, and the higher exempt amount ($30,720) applies January through May for calendar year 2003. The FRA no longer applies from the month of FRA attainment and on.
(See §1808.2 for test used when a beneficiary dies in the year of turning FRA.)
Last Revised: Aug. 8, 2011