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Thread: SSI and 1099 employment

  1. #1
    Senior Member teesieme's Avatar
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    SSI and 1099 employment

    What mess would this mean? And would a ticket to work help?
    "I want to make a difference! However small it may be~ as long as it's a positive one, then this is what my life will have been about and I will go knowing I did my best.~ T.

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    Senior Member teesieme's Avatar
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    My son graduated this fall with his mechanics diploma and has since been offered a good job with great opportunity and potential in the field of his dreams. The employer has since the initial interview prior 2008, changed from hourly/salary taxed paycheck to employees to a 1099 at the end of the year, each employee as an independent contractor I believe their status or title to be within the area of each position/job duties.

    Anyhow, what exactly does this mean? And what of an income as such w/ ssi- is it first 80/85 off net or gross, and what of the end of year taxable income, etc. etc.

    Also, the v/r advised him to use ticket to work prior the 1099 decision when he had mentioned his finding this job...

    I am extremely proud of my son. And admire his determination to both continue where his injury and the system sidetracked him for years to succeed with a job offer he can go places with as he learns. He knows he wil have to lose to gain in the end but what is the best route for him to go with employment and ssi? We've made so many mistakes getting to this point, costing an already low income mom here pplus loans as well as his student loans then later learning out of state student funding would've been better, easier- blah, blah, blah.

    I'd really appreciate your advice/thoughts, T.
    "I want to make a difference! However small it may be~ as long as it's a positive one, then this is what my life will have been about and I will go knowing I did my best.~ T.

  3. #3
    Congrats with the job offer. I don't post here much but am always watching.

    I've been self employeed and running a business for several years, so I know a little about a 1099. They can be good as far as tax write off because you are your own employeer, they pretty much say the you are a subcontractor. So you can write off all work related expences like cars, gas, and matainence. Even part of your rent can be written off for an office. But all this depends on the job title and a talk with an accountant would be good to keep yourself out of trouble.

    The down side is you are responsable for paying your own taxes state and federal. This isn't a big deal if you save for it and you can pay quarterly to ease the sting of writing the government a check at the end of the year. Plus they charge interest if you don't. This is all money that your employer normally withholds from your pay check and payes in for you. The only real expense is the in this is when you have to pay into SSI. The employer would normally pay 1/2 of this for you and when you are self employeed you pay the full amount.

    The other big one is you get no workmans comp when you are self employeed so if you get hurt at work it is on you tab and your insurance.

    As far as receiving the SSI you can get on a work trial basis so you can still recieve it for 10 months while getting income.

    It has some great advantages and disadvantages depending on your situation. I would also look that the rules for 1099 (they will come with the aplication) and your son's job description to make sure it is legal what the employer is doing. A lot a construction companys do this to get out of paying workers comp and it is illegal for the employer but the employee is fine.

    Sorry for the rant I just got done ding all my 1099 and W-2's. Hope this helps and doesn't confuse you too much.
    "Donny you're out of your element!" ~ Walter Sobchak

    T-5 Complete 9/15/06

  4. #4
    Also, was he getting health insurance or other benefits as an employee, and how will he get these as an independent contractor.

    The rules for who is and is not an indep. contractor are very complex. My understanding is that if you work full time for the employer, they set the hours and conditions of work, you use their tools, etc. that it is unlikely they can legally convert you to an indep. contractor status, but you probably should look at the IRS rules for this. He may need to look for another job though, because challenging his employer on this could get him fired!

    (KLD)

  5. #5
    Senior Member teesieme's Avatar
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    TY Rebar/Nurse KLD~

    It is a good group of people he would work with/for. They've already been very accomodating in ways to prepare/set up shop around him, as he's spent some free time there in training for the purpose of eventual employment and to learn all he can in doing so for his future independently one day with owning his own business.
    I wondered about the insurance end of things but doesn't workman's comp. requirements differ state to state anyhow, whether self employed or otherwise?
    I guess my question centers more at this time as to the decision of his going with a "ticket to work" and 1099 employment, the TWP deal and whatever else would be crucial to opening up his future without risking his medicaid. He does not have other insurance. SS informed us he does not qualify nor will he for medicare no matter his six year post status because of his age at time of injury and working period wasn't enough, thus ssi not ssdi.
    Gawd in some ways, I hate trying to figure this crap out more than the disability itself... sigh.
    "I want to make a difference! However small it may be~ as long as it's a positive one, then this is what my life will have been about and I will go knowing I did my best.~ T.

  6. #6
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    I would expect that the point of paying him as an independant contractor (uith a 1099) is to get out of covering his health insurance and workmans comp. I don;t think ssi cares whether the income comes from a regular paycheck or 1099.
    T7-8 since Feb 2005

  7. #7
    Senior Member ChesBay's Avatar
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    Quote Originally Posted by teesieme
    TY Rebar/Nurse KLD~

    I guess my question centers more at this time as to the decision of his going with a "ticket to work" and 1099 employment, the TWP deal and whatever else would be crucial to opening up his future without risking his medicaid. He does not have other insurance. SS informed us he does not qualify nor will he for medicare no matter his six year post status because of his age at time of injury and working period wasn't enough, thus ssi not ssdi.
    Gawd in some ways, I hate trying to figure this crap out more than the disability itself... sigh.
    Sounds smart that you are talking to SS. In regard to "TWP" or 'trial work period ' unless things have changed there is not a TWP for SSI. There is one for SSDI.

    You may want to look into the "1619b program" with Social Security. If you can find a SS worker that has knowlege on how to set one up your son would be able to maintain Medicaid as long as his income stays below a "income threshold limit." The limits are realistic and much better than Federal Benefit Rate on SSI. The program ( 1619b) has been around for a long time but I don't know how often it is used.

    http://www.ssa.gov/disabilityresearch/wi/1619b.htm

    edited to add: the "income threshold" under 1619b for Minnesota is $44,799

  8. #8
    I was reading this 1619b thing. Seems to be only for SSI Is there something similar for SSDI?

  9. #9
    Senior Member ChesBay's Avatar
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    Quote Originally Posted by addiesue
    I was reading this 1619b thing. Seems to be only for SSI Is there something similar for SSDI?
    I think it is exclusive to just SSI recipients.

    If you are on SSDI as you probably know you can get a "Trial Work period" keeping your Medicare and at the end of TWP they ( SSA) should determine you are engaged in "substantial gainful activity" ( SGA). If it determined you are at the SGA level you can have your benefits terminated. In 2008 any months which an individual earns $670 gross or more is considered a 'Trial work period month.'
    http://www.ssa.gov/OACT/COLA/twp.html

    The amount of income to be considered "substantial gainful activity" in 2008 is $ 940. gross per month. I would recommend anyone to stay at least a hundred or more below that amount.

    http://www.ssa.gov/OACT/COLA/sgadet.html#nonblind

    I hope that helps. I don't work for SSA but have had some training through work. So, please don't take my advice as Gospel... check with SSA. ( be careful to double check their info also! )

  10. #10
    My trial work period started September. I make just barely over the SGA now. I mean JUST BARELY. Still working out all these kinks.

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