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Accounting and Tax Tips Blog

We’ve been receiving numerous inquiries from people who have Sharing Economy Income and also Social Security Disability Insurance (SSDI). If you’re on SSD or SSI, sharing economy income can impact your eligibility. For these reasons, we’ve created a post to help you navigate handling both income streams.

Reasons for Losing SSD Benefits

If the medical or psychiatric conditions that resulted in your disability improve, then the Social Security Administration may determine that you are no longer eligible for benefits because you are no longer disabled. However, the most common reason that people lose their SSDI benefits is they have returned to work.

If you decide to return to work while you are receiving Social Security disability benefits, the Social Security Administration will review your work activities in order to determine if you have engaged in a substantial gainful activity (SGA). If you exceed the SSA’s thresholds for SGA, then your benefits will be revoked.

For 2016, the Social Security Disability Thresholds are the following:

SSD benefits taxes

Substantial Gainful Activity (SGA)

  • Non-Blind                    $1,090/mo.      $1,130/mo.
  • Blind                            $1,820/mo.      $1,820/mo.
  • Trial Work Period      $780/mo.         $810/mo.

The Trial Work Period (TWP) is a time period when SSD recipients can return to work without losing benefits. In most cases, you can return to work for up to 9 months before losing your benefits.

If you’re a dependent that receives benefits based on another person’s earnings, you could lose your benefits for several reasons. Reaching retirement age, changing living arrangements, or getting married could freeze your benefits. You can also lose your benefits if you leave the U.S. for more than 30 days. You could also lose your benefits if you are incarcerated or institutionalized.

While Social Security does have special rules that apply to individuals who receive SSD payments, there are some instances in which can you continue to receive your full monthly benefits and income. However, you should be aware of what these rules are so that you do not jeopardize your payments. Here are the rules to help you keep your Sharing Economy income and SSDI.

Passive Income and SSDI

For the purposes of determining your Social Security disability benefits, earned income, the income earned from working, will determine your benefits. Conversely, passive income is income that you receive on a regular basis that requires little effort. Social Security does not include passive income in the determination of benefit payments.

Investment income is passive income. In most cases, the IRS views rental income as passive. Other examples of investment income include interest, pensions, capital gains, and annuities.

homeshare rental

How to Report Homeshare Income

Homeshare income affects the SSA’s determination of your benefits. If your rental income is passive, you report it on Schedule E (Form 1040), aka supplemental income and loss. Use this form to report income or loss from rentals.

However, if you work on the property, collect rent, renovate, or repair, the IRS may consider you self-employed. In this case, you would report your Homeshare income on Schedule C (Form 1040), Profit or Loss From Business. Social Security will count whatever you report on Schedule C to determine your net earnings from self-employment.

If you haven’t worked on your rental property, you can report the rental income as Schedule E.

Hire a Third-party to Maintain Your Property

Since self-employment income can affect your disability benefits, it is important that you do not perform any physical work on the Homeshare rental property. Performing work activities on the property will jeopardize the status of your Homeshare income as passive income.

It is also important to keep careful records of the activities that are being performed on your behalf, including compensation. Now, you can prove your income wasn’t from work activities.

How to Report Your Rideshare Income

Generally speaking, all Rideshare Income and on-demand service is Schedule C income, not passive income. Failure to properly canceling your SSDI income could result in you paying the amounts back and legal ramifications

If you have any questions about how your Sharing Economy income affects SSD benefits, please feel free to contact us. You can also sign up for our free tax tips newsletter using the form below.