Withdrawing SS application after FRA (update and new questions)

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02nz
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Withdrawing SS application after FRA (update and new questions)

Post by 02nz »

1/24/20 UPDATE and add'l question in new post, below.

Short version: It is possible to withdraw the Social Security application (and pay back benefits already received) after one has reached FRA?

My dad applied for and started receiving SS benefits upon reaching FRA (66) earlier this year. However, somewhat unexpectedly he then took a fairly high-paying position, which makes much of his SS benefits taxable at high rates. It makes a lot of sense to withdraw the SS application, pay back the benefits already received, and start taking SS again once he retires for good, likely at age 69 or so. However, when we called SSA we were told he could not withdraw the application since he has already reached FRA. I suspect we were given incorrect information, since I haven't been able to find anything online that says you can't withdraw the application after reaching FRA. (I realize you're limited to one withdrawal, which is not a problem here.) Looking to confirm one way or another without calling SSA again (and waiting on hold for about an hour!). I suppose if he really can't withdraw the application, he can at least suspend the payments. That will still mean a high rate of taxation on SS benefits received this year but he can avoid it going forward. Thanks all.
Last edited by 02nz on Fri Jan 24, 2020 2:43 pm, edited 3 times in total.
Silk McCue
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Re: Withdrawaing SS application after FRA

Post by Silk McCue »

This is my read.

Since its been less than 12 months since he began receiving benefits it appears he should be able to withdraw without regard to FRA. From reading the detail on the attached SS webpage it would appear he would be stuck with only being able to suspend payments IF it had been longer than 12 months.

https://www.ssa.gov/planners/retire/withdrawal.html

Cheers
Austintatious
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Re: Withdrawaing SS application after FRA

Post by Austintatious »

Here's a brief article on the subject.

http://www.helpwithmysocialsecurity.com ... ication-3/
Topic Author
02nz
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Re: Withdrawaing SS application after FRA

Post by 02nz »

Thanks. We knew about the 12-month restriction but he's well within it. It does seem like the rep was wrong about not being able to withdraw the application after reaching FRA, as I can find nothing about that anywhere. Maybe we'll just send in the withdrawal form and see what SSA does with it.
Austintatious
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Re: Withdrawaing SS application after FRA

Post by Austintatious »

Here's the relevant section of the U.S. Code of Federal Regulations. See subsection b for withdrawals of applications for benefits for which the Service has already made a determination. I certainly don't see a provision stating that such an application may not be filed subsequent to reaching FRA.

https://www.ssa.gov/OP_Home/cfr20/404/404-0640.htm
Topic Author
02nz
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Re: Withdrawaing SS application after FRA

Post by 02nz »

Austintatious wrote: Mon Oct 29, 2018 1:08 pm Here's the relevant section of the U.S. Code of Federal Regulations. See subsection b for withdrawals of applications for benefits for which the Service has already made a determination. I certainly don't see a provision stating that such an application may not be filed subsequent to reaching FRA.

https://www.ssa.gov/OP_Home/cfr20/404/404-0640.htm
Thanks, that seems to confirm that the rep was wrong.
Topic Author
02nz
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Re: Withdrawing SS application after FRA

Post by 02nz »

So this was quite an ordeal. Social Security acknowledges that the withdrawal paperwork was received in late 2018, but benefit payments continued until mid-2019. After many calls, they finally stopped those, but only after many more calls did they finally tell us how much the repayment would be. We sent in checks for both of my parents for the repayment. These checks were deposited by Social Security in December 2019. We have not yet received official acknowledgment that the withdrawal is complete.

However, in the meantime my parents have received the SSA-1099 forms for 2019. These have the benefit amounts that were paid in 2019 (as expected) but do NOT show the amounts that they repaid (around $30K between the two of them).

New questions: I'm hoping someone knowledgeable on this stuff can tell me what's supposed to happen: Will Social Security automatically send a revised SSA-1099 for 2019 showing the amount repaid? Or should we call and request that? Should they file taxes as though the amount was repaid in 2019, or do they have to wait until they do their 2020 taxes? I will call Social Security of course, but they've made such a mess of this up to this point that I'd really like to know what's supposed to happen before I hear their answers. Thanks again.
Jazzysoon
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Re: Withdrawing SS application after FRA (update and new questions)

Post by Jazzysoon »

I'd expect more of the same kind of ordeal. In fall of 2018 with supposedly plenty of time to have it all happen during same tax year, I submitted my withdrawal inperson at local office. My amount to repay was clear, and I tried multiple times in person and over phone to get it paid by 12/31, but without official letter they wouldn't accept. I didn't get my letter til 6+months after filing (longer than projected 45-60d). So I received 2018 SSA-1099 and had to pay taxes on it. Worked with my tax person to see how it would handled in 2019 and since looked like I would get full credit for taxes paid and then have a large overpayment, I didn't pay estimated taxes in 2019. In August of 2019 I received a 2018 SSA-1099 AMENDED form, effectively zeroing out the SS I received. Back to tax guy and & filed amended 2018 form, indicating not to get a check for 2018 overpayment, keep it for 2019 taxes. So then in November 2019 I get Treasury check for full 2018 overpayment. So I quickly scrambled to get 2019 Estimated taxes paid.

Hopefully your experience will be smoother...

IRS Pub 915 should provide you more info.
Page 15 - Repayments More Than Gross Benefits
Repayment of benefits received in an earlier year. If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you may be able to deduct part of this negative

Also - My state doesn't tax SS, but if your parents does you will need to get credit there as well.
Topic Author
02nz
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Joined: Wed Feb 21, 2018 3:17 pm

Re: Withdrawing SS application after FRA (update and new questions)

Post by 02nz »

Thanks Jazzysoon. Sounds like we should call and see if they can send out amended SSA-1099 sooner. And just file for extension on my parents' 2019 return so they don’t have to amend it later.
Last edited by 02nz on Fri Jan 24, 2020 4:17 pm, edited 1 time in total.
vtMaps
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Location: central Vermont

Re: Withdrawing SS application after FRA (update and new questions)

Post by vtMaps »

When my wife got the run around from social security, she wrote to her congressman. Things got straightened out in a couple of weeks. The letter is here:
viewtopic.php?t=249904#p4245683

--vtMaps
Historical Fact: Justin Smith Morrill represented Vermont in congress, had a dog named 'Trump', and wrote legislation establishing the Land Grant Colleges.
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