To have Social Security Act (SSA) exempt employment, the employee did not pay Social Security taxes on income they earned while they worked for a particular employer. Therefore, the employee is not eligible to be paid Social Security benefits.
The most prevalent type of employment that does not earn Social Security benefits are firefighter retirees, police officer retirees, some federal retirees that are covered under the Civil Service Retirement System and began employment before 1984, and a few state and local government employees.
A retiree that qualifies under the two conditions below are allowed a larger retirement, pension or Michigan standard deduction.
- If the taxpayer was born between January 1, 1946 and January 1, 1958 or was born after December 31, 1952 and retired as of January 1, 2013 and
- The taxpayer receives, or the spouse receives, a pension or retirement benefits from work with a government agency not covered by federal SSA.
To determine if you are considered SSA Exempt, please answer the questions in the instructions and check the box Yes if you are SSA Exempt and No if you are not SSA Exempt. See the instructions here under Subtractions from Income.