What it Means to be Entitled
The word “entitlement” is often perceived negatively — as if a person receives benefits he or she did not earn. Sometimes the opposite is true. One of the definitions of entitlement in Merriam-Webster dictionary is “a right to benefits specified especially by law or contract.”1
This is why government programs such as Social Security and Medicare frequently are referred to as entitlement programs — their beneficiaries have contributed a portion of income to them throughout their working lives and are thus entitled to lifelong benefits once they retire. They have earned the right to claim those benefits.
The following are general eligibility criteria to qualify for Social Security retirement benefits:2
- You must be a U.S. citizen or lawfully present alien.
- Social Security measures work in “work credits,” and you can earn up to four work credits per year, based on annual earnings. For Social Security eligibility, you must have earned an average of one work credit for each calendar year between age 21 and the year in which you reach age 62, up to a maximum of 40 credits (a minimum of six work credits is required).
- You can be the spouse of a qualifying recipient.
- You can be the ex-spouse of a qualifying recipient with whom you were married for at least 10 years and have been divorced for at least two years.
Our firm is not affiliated with the U.S. government or any governmental agency.
1 Merriam-Webster. “Entitlement.” https://www.merriam-webster.com/dictionary/entitlement. Accessed Jan. 15, 2018.
2 Social Security Administration. 2017. “Understanding Supplemental Security Income Social Security Entitlement — 2017 Edition.” https://www.ssa.gov/ssi/text-entitle-ussi.htm. Accessed Dec. 28, 2017.
Money Saving Tips
Retirees and Tax Returns
Under what circumstances can you not file a federal tax return? Presently, there are two scenarios:1
- If Social Security benefits are the taxpayer’s only source of income; or,
- In the 2017 tax year, if a taxpayer’s total income is less than his or her standard deduction plus one exemption (assuming the taxpayer is not claimed as a dependent on another taxpayer’s return).
Taxpayers who are single and at least 65 years old must file an income tax return if their gross income is $11,950 or more. If taxpayers are married and filing jointly with a spouse who is also 65 or older, they must file a return if their combined gross income is $23,300 or more. If one spouse is younger than 65, the threshold is $22,050.2
If taxpayers receive income from other sources — including tax-exempt interest — they may have to file a return even if they don’t owe any taxes. To determine if taxes are due, they would add half of their annual Social Security benefits with all other income. If that amount exceeds the base amount for their filing status, some of their Social Security benefits may be taxable. For the 2017 tax return year, the base amounts are $25,000 for a single filer and $32,000 if married and filing jointly.3
1 Intuit. 2017. “When Does a Senior Citizen on Social Security Stop Filing Taxes?” https://turbotax.intuit.com/tax-tips/retirement/when-does-a-senior-citizen-on-social-security-stop-filing-taxes/L53Hx1v9W. Accessed Dec. 31, 2017.
Tax Credit for the Elderly and Disabled
Taxpayers age 65 and older may be eligible to claim a tax credit for the elderly and disabled. This credit also is available for people who have retired with a total and permanent disability and receive taxable disability income. Note, however, that in both cases, taxpayers may be ineligible if their income exceeds certain limits.1
Qualifications for individuals age 65 and older also vary based on tax filing status. For those who are married, spouses must file a joint return to take the credit. Those who file as Head of Household must meet additional criteria, as detailed in IRS Publication 524.2
Neither our firm nor its agents or representatives may give tax advice. Be sure to speak with a qualified professional about your unique situation.