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1. Are Gambling Winnings Considered Earned Income For Social Security Purposes
2. Are Gambling Winnings Considered Earned Income For Social Security Income

1. Recreational gambling income, including lottery winnings, are not considered earned income. The distinction between earned income and ordinary income is for such issues as earned income tax credit.
2. Depending on the size of your win, you may receive a Form W-2G, Certain Gambling Winnings and may have federal income taxes withheld from your prize by the gambling establishment. Gambling winnings are unique because you can also deduct your gambling losses and certain other expenses, but only in specific circumstances (see our article about this).

Yes. Report it right away. When you signed up for SSI they sent you a notice and the application says you agree to report any change in status (and winning $8000 counts as a change). The longer you wait, the more SS will think you are trying to hide it, and the more they think that, the more they will want to start a fraud investigation.

Are Gambling Winnings Considered Earned Income For Social Security Purposes

What You Need to Know About the Social Security Earnings Test and Income Limit. The first thing to know is that, right now, the earnings limit only applies before your full retirement age. Once you reach your full retirement age, you can earn a bazillion dollars and continue to receive your full Social Security benefit. Only earned income from wages as an employee or self-employed worker's net income will affect Social Security retirement benefits. Supplemental Security Income (SSI) is a different story and winnings from gambling must be reported.

Are Gambling Winnings Considered Earned Income For Social Security Income

The exact answers to questions like this require more information than presented. The answer(s) provided should be considered general information. The information provided by this is general advice, and is not legal advice. Viewing this information is not intended to create, and does not constitute, an attorney-client relationship. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. You should not take any action that might affect your claim without first seeking the professional opinion of an attorney. You should consult an attorney who can can ask all the appropriate questions and give legal advice based on the exact facts of your situation. The general information provided here does not create an attorney-client relationship.