How You Earn Credits

How You Earn Credits

The credits are based on the amount of your earnings. We use your work history to determine your eligibility for retirement or disability benefits or your family's eligibility for survivors benefits when you die.

In 2004, you receive one credit for each $900 of earnings, up to the maximum of four credits per year.

Each year the amount of earnings needed for credits goes up slightly as average earnings levels increase. The credits you earn remain on your Social Security record even if you change jobs or have no earnings for a while.

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Special rules for some jobs

Special rules for earning Social Security coverage apply to certain types of work.

If you are self-employed, you earn Social Security credits the same way employees do (one credit for each $900 in net earnings, but no more than four credits per year). Special rules apply if you have net annual earnings of less than $400. For more information, call us for a free copy of the publication, If You Are Self-Employed (Publication No. 05-10022).

If you are in the military, you earn Social Security credits the same way civilian employees do. You also may get additional earnings credits under certain conditions. For more information, call us for a free copy of the publication, Military Service And Social Security (Publication No. 05-10017).

We also have special rules about how you earn credits for other kinds of work. Some of these jobs are—

• Domestic work;
• Farm work; or
• Work for a church or church-controlled organization that does not pay Social Security taxes.

Call us if you have a question about how you earn credits in your job.

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How long do you have to work to qualify for Social Security?

The number of credits you need to be eligible for benefits depends on your age and the type of benefit.

Retirement benefits

Anyone born in 1929 or later needs 10 years of work (40 credits) to be eligible for retirement benefits. People born before 1929 need fewer years of work.

Disability benefits

How many credits you need for disability benefits depends on how old you are when you become disabled.

• If you become disabled before age 24, you generally need 1½ years of work (six credits) in the three years before you became disabled.

• If you are 24 through 30, you generally need credits for half of the time between age 21 and the time you became disabled.

• If you are disabled at age 31 or older, you generally need at least 20 credits in the 10 years immediately before you became disabled. The following table shows examples of how many credits you would need if you became disabled at various selected ages. This table does not cover all situations.

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• Most federal employees hired before 1984 (but since January 1, 1983, all federal employees have paid the Medicare hospital insurance part of the Social Security tax);
• Railroad employees with more than 10 years of service;
• Employees of some state and local governments that chose not to participate in Social Security; or
• Children younger than age 21 who do household chores for a parent (except a child age 18 or older who works in the parent’s business).

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Make sure your records are accurate

Each year your employer sends a copy of your W-2 (Wage and Tax Statement) to Social Security. Social Security compares your name and Social Security number on the W-2 with our records. When we find your name and number, your earnings shown on the W-2 are recorded on your lifelong earnings record. Your lifelong earnings record is what we use to figure whether you can get future benefits and the benefit amount.

It is critical that your name and Social Security number on your Social Security card agree with your employer’s payroll records and W-2. If they do not agree, your employer may get a letter from Social Security. This letter does not mean that your employer should change your job, lay you off, fire you or take other action against you. You need to correct the error. It is up to you to make sure both records are correct. If your Social Security card is not correct, contact any Social Security office. Tell your employer if your name and Social Security number are incorrect on the employer’s record.

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