Ask Larry

When I Pay Off My Back Social Security Taxes Will My Social Security Benefits Increase?

I'm on an installment plan. When I pay off the $10.000 behind back social security taxes that I owe, will my social security benefits increase?

Hi. I can't give you a definitive answer. About the only way that paying past due Social Security taxes might increase your Social Security retirement benefit rate is if you reported self-employment earnings for past years, and if those earnings haven't yet been considered when calculating your benefit rate. Even then, your benefit rate would only increase if the newly reported earnings were high enough to replace a lower earnings year. Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings, so additional years of earnings only increase a person's benefit rate if they're higher than one or more of the 35 years currently being used to calculate the person's benefit rate.

Best, Jerry

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Posted: 
Apr 15 2021 - 1:00pm
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