I am on SSDI and make below the SGA cap ($1100/month before taxes) at my part time job of many years. I post some of my artwork online but don’t do any sales; it’s just a casual hobby. A t shirt company saw one of my designs and wants to pay me $1200 in a one time payment to buy rights to it. I’d fill out the proper paperwork to reflect they are paying me as a contractor so this would be reported to the SSA as wages for that month, even though this is truly a random, one time thing that would never happen again. Will a one time overage like this jeopardize my SSDI/disability eligibility?

Hi. There's not a simple answer to your question. First of all, you only earn wages when you're working for an employer. Income earned outside of an employer/employee relationship is reported as self-employment earnings. However, income received from a hobby is normally not classified as earned income, but if you create artwork and put it on the market to sell then you may have crossed over the line from a hobby a trade or business. And, income produced from a trade or business is considered as earnings, and is reported as self-employment income on your tax return.

Whether or not your income would correctly be classified as self-employment depends on a number of factors, so I would suggest contacting Social Security and the IRS to discuss your circumstances in detail. If in fact your income must be reported as self-employment, Social Security doesn't just evaluate self-employment based on what month you receive payment for your services. Instead, Social Security would likely consider your self-employment income to have been earned in the months that you produced the artwork and would average your income over that period of time, That income would then be added to your wages from your other job when evaluating whether or not your work and earnings exceeded Social Security's substantial gainful activity (SGA) amount.

However, Social Security also evaluates other factors besides income when self-employment income is involved, such as the reasonable worth of the services the disabled person performs and how those services compare with work performed by unimpaired individuals (https://secure.ssa.gov/apps10/poms.nsf/lnx/0410510010). In other words, it's complicated. Assuming that you will be reporting this income as self-employment earnings, you'll need to report the details to Social Security so that they can evaluate your work in order to determine what if any effect it might have on your benefits.

Best, Jerry