(a) When we apply the annual earnings test to your earnings as a beneficiary under this subpart (see §404.415), we count all of your earnings (as defined in §404.429) for all months of your taxable year even though you may not be entitled to benefits during all months of that year. (See §404.430 for the rule that applies to the earnings of a beneficiary who attains full retirement age (as described in §404.409(a))).

(b) Your taxable year is presumed to be a calendar year until you show to our satisfaction that you have a different taxable year. If you are self-employed, your taxable year is a calendar year unless you have a different taxable year for the purposes of subtitle A of the Internal Revenue Code of 1986. In either case, the number of months in a taxable year is not affected by:

(1) The date a claim for Social Security benefits is filed;

(2) Attainment of any particular age;

(3) Marriage or the termination of marriage; or

(4) Adoption.

(c) The month of death is counted as a month of the deceased beneficiary's taxable year in determining whether the beneficiary had excess earnings for the year under §404.430. For beneficiaries who die after November 10, 1988, we use twelve as the number of months to determine whether the beneficiary had excess earnings for the year under §404.430.

(d) Wages, as defined in §404.429(c), are charged as earnings for the months and year in which you rendered the services. Net earnings or net losses from self-employment count as earnings or losses in the year for which such earnings or losses are reportable for Federal income tax purposes.

[70 FR 28811, May 19, 2005]