I am currently on full disability & wondered if there is any penalty for having a K-1 (business partnership income) issued to me? And do I need to report this to Social Security as I am not performing any job duties. Thanks for your advice.

Hi,

The answer to your question depends on the specific circumstances involved with your partnership. Income from a partnership could only have an adverse effect on Social Security disability (SSDI) benefits if the income is considered as 'earned'. If your partnership income is classified as earned under IRS rules, you would be required to report your earnings on a schedule SE and pay self-employment taxes. You might want to check with the person who prepares your taxes to see if your partnership income will require you to pay self-employment taxes. If it does, you should report the details of your partnership involvement to Social Security.

Best, Jerry