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Top Social Security Questions From Readers

From unemployment compensation to household employees, here's how your benefits are affected

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If you hire someone to work in your home, you may need to deduct Social Security taxes from their wages.

En español |Americans are constantly sending questions to the Social Security Administration, on countless subjects. Here's a sampling of some of the most common ones, and my answers to them.

Q. Do I have to withhold Social Security taxes on my household worker's earnings?

A. It depends on how much you pay. In 2015, if the figure totals $1,900 or more, you're required to deduct Social Security and Medicare taxes from the wages, report the wages to the Social Security Administration and send the taxes to the IRS. Also, you're required to include as pay any cash you provided for transportation, meals or housing.

Complying with the law will involve a certain level of record keeping. And it will cost you something, too: Both you and your employee will each pay a 6.2 percent of the employee's earnings as Social Security tax and 1.45 percent as Medicare tax. Early in the new year, you'll need to issue your employee a W-2 form and report the wages. You can do both those tasks online. You'll then pay the taxes as part of your regular income tax return that's due April 15. You'll need to pay unemployment tax, too.

It's a pain, but it's the law and it's worth it: It will ensure that the worker gets credit toward Social Security benefits and Medicare coverage in the future.

Fortunately there's a great deal of information, both print and electronic, to guide you through the rules and regulations. Have a look at a Social Security booklet titled "Household Workers."

Q. How does the recent US Supreme Court decision about the Defense of Marriage Act affect Social Security benefits?

A. In a 5-4 decision in 2013, the Supreme Court struck down a portion of the Defense of Marriage Act that denied federal benefits to same-sex couples. The decision allowed people who live in states that allow same-sex marriage to receive the benefits.

As a result, the Social Security Administration says it's now processing some retirement, surviving-spouse and lump-sum death payment claims for same-sex couples and paying benefits that are due. SSA is also considering same-sex marriages when processing some claims for Supplemental Security Income (SSI).

See also: Social Security and survivor benefits

The agency offers this advice to same-sex couples: "If you believe you may be eligible for benefits, we encourage you to apply now to protect you against the loss of any potential benefits." Help can be found at the Social Security hotline, 800-772-1213 (TTY 800-325-0778).

Q. If I collect unemployment compensation, will it affect my Social Security benefits?

A. This has a two-part answer. Part one is that Social Security does not count unemployment benefits as earnings. Therefore, any money you receive for being out of work will not affect your retirement benefits. But part two is that the money you receive from Social Security could reduce your unemployment compensation — if you live in Illinois or Minnesota. In all other states, there will be no effect.

Q. Why is my Social Security number on my Medicare card, and can I get a card that doesn't have it?

A. The number is there because Medicare uses it to identify you in the huge records systems that it maintains. But many people have worried that putting the number on the cards is an invitation to identity theft. So for years, subscribers, government agencies and health-related organizations campaigned vigorously to remove the number, but Medicare kept giving an answer of no. One reason was that developing a new Medicare numbering system was estimated to ultimately cost $800 million, according to AARP Medicare expert Patricia Barry.

Then, in April, we suddenly got a new answer to the old question: Yes. A bill signed by President Obama will remove the numbers from Medicare cards. In its place, a new Medicare identification system will be developed over an eight-year period. "Ending Social Security numbers on Medicare cards once and for all is a no-brainer," says Rep. Sam Johnson (R-Texas), a cosponsor of the measure.

In the meantime, it's a good idea not to routinely carry your Medicare card. Instead carry a photocopy with several of the digits cut out — it will probably be accepted as proof of coverage in an emergency. Bring the real card for first visits to doctors.

Q. Can I get a new Social Security number if I'm a victim of identity theft?

A. Perhaps. Social Security says it's aware that identity theft is one of the fastest-growing crimes in America and often begins with the theft of a person's Social Security number. "If you have done all you can do to fix the problems resulting from misuse of your Social Security number and someone still is using your number," the agency says, "we may assign you a new number."

But you can't get one if your purpose is to avoid bankruptcy or engage in some illegal scheme. You'll have to provide evidence of your identity and an ongoing problem with identity theft. The agency also cautions that a new number may create problems for you because it may not be associated with a credit history, making it more difficult for you to get a loan.

A helpful booklet, "Identity Theft and Your Social Security Number,"contains suggestions on how to solve problems created by the theft.

Learn to maximize benefits! Read AARP's Social Security for Dummies

There are a few other special circumstances in which the agency will consider issuing a new number. They include situations of harassment or abuse, and religious or cultural objections to the use of certain digits in the original number.

Q. Can Social Security benefits go to the estates of beneficiaries who've died?

A. Yes, but only a small amount. You can't keep monthly payments flowing to an estate.

It sometimes happens that a person dies while a benefit payment is due. In that event, Social Security may pay the amount to a family member or legal representative of the estate. Family members can help speed the process by filling out Form SSA-1724 and providing information the agency needs to decide who is entitled to the benefits of the deceased.

Stan Hinden, a former columnist for the Washington Post, wrote How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. Have a question? Check out the Social Security Mailbox archive. If you don't find your answer there, send an email to the Social Security Mailbox.

 

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