Ask Rusty: Why is there a Social Security Earnings Limit?

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Dear Rusty: I am age 62 and considering my retirement options and when I should do that to get the most benefits. I understand my full retirement age is 67, but what I don’t understand, and I hope you can answer, is why there is such a thing as the Social Security (SS) earnings limit? […]

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Dear Rusty: I am age 62 and considering my retirement options and when I should do that to get the most benefits. I understand my full retirement age is 67, but what I don’t understand, and I hope you can answer, is why there is such a thing as the Social Security (SS) earnings limit? I know that if I was to retire before age 67, my benefits would be reduced. But since I have been paying into SS for 45-plus years, and that money is technically money I have earned, why does the Social Security Administration (SSA) care if I make more than the earnings limit? It doesn’t affect them or my benefits. Can you tell me about the reasoning behind the earnings limit? I will, for many years after “retiring,” continue working in my field.

Signed: Working American

Dear Working American: This is a great question and, as a point of interest, our parent organization, the Association of Mature American Citizens (AMAC), advocates doing away with the Social Security earnings test which affects those collecting benefits before reaching their SS full retirement age (FRA). In AMAC’s view, it discourages people from working and, thus, paying Social Security taxes on their earnings. It is, after all, SS taxes from the earnings of working Americans which largely pays for the benefits provided to Social Security beneficiaries. Eliminating the restriction would tend to improve Social Security revenue and help ease Social Security’s current financial stress.

The reasoning behind the earnings test? Well, when Social Security was first enacted in the 1930s, the intent was that Social Security was for retired workers, meant to keep them from poverty in old age. The logic back then was that if people worked, they didn’t need Social Security to sustain them, so those who worked could not collect Social Security at all. The current rule, after many adjustments over the years, says that annual earnings for those who collect early SS benefits are limited. If each year’s earnings limit ($22,320 for 2024) is exceeded, the SSA will take away $1 in benefits for every $2 over the limit (FYI, the penalty is less severe in the year you attain FRA).

Historical accounts suggest that the reasoning behind the wording in the original Social Security Act — that “No person shall receive such old-age annuity unless . . . he is not employed by another in a gainful occupation” — was quite controversial, except for the fundamental thought that if individuals worked, they didn’t need Social Security. Over the ensuing decades, the rule has been softened to provide that only those who collect benefits before their full retirement age (FRA) would have a portion of their SS benefits offset by their work earnings. In any case, the earnings test, in its mitigated form, still persists today. FYI, H.R. 5193, the Senior Citizens Freedom to Work Act, was recently introduced in Congress proposing to repeal the SS earnings test but has not advanced in the legislative process since introduced in August 2023.

In any case, under current rules, if you continue working after your FRA, the earnings test will not apply to you. And, if you lose any benefits before your FRA due to the earnings test, when you reach your FRA, you’ll get time credit for any months that benefits were withheld, resulting in a slightly higher monthly payment after your full retirement age.

One final point: if you continue to work after starting your Social Security benefits and your recent earnings are higher than any of those in the inflation-adjusted 35 years used to originally calculate your benefit, your entitlement will be recalculated to give you credit for those higher recent earnings

Russell Gloor is a national Social Security advisor at the AMAC Foundation, the nonprofit arm of the Association of Mature American Citizens (AMAC). The 2.4-million-member AMAC says it is a senior advocacy organization. Send your questions to: ssadvisor@amacfoundation.org.

Author’s note: This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained, and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity.

VIEWPOINT: ERTC Claims are Moving Again

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In the wake of the COVID-19 pandemic, Congress passed the Employee Retention Tax Credit (ERTC) in an effort to help struggling businesses keep their employees on payroll throughout the pandemic. However, the Internal Revenue Service (IRS) has found that, in its few short years of existence, the ERTC program has been rife with fraud and abuse due in large part to third-party “promoters” that have misled business owners into filing ERTC claims for which they are not eligible in order to collect a percentage of the claim as a fee — an issue that we have discussed in a prior information memorandum (https://www.bsk.com/news-events-videos/employee-retention-tax-credit-consultants-and-eligibility-traps-for-the-unwary). Unfortunately, many of these ERTC claims have been erroneously paid and the IRS has been diligently pursuing recovery of [these payouts]. To date, the IRS has recovered about $2 billion in improperly paid ERTC credits and intends to continue its efforts through new initiatives.

Most recently, in an effort to prioritize the processing of ERTC claims and deliver relief to small-business owners who have filed legitimate claims, the IRS instituted a processing moratorium on ERTC claims, effective Sept. 14, 2023, followed by a detailed review of about 1 million of its unprocessed ERTC claims, representing more than $86 billion, and, as a result of the review, has now announced plans to categorize claims into three groups and either process, deny, or conduct further review of those claims accordingly.

Specifically, in its review of the about 1 million unprocessed ERTC claims, the IRS found that, first, between 10 percent and 20 percent of the claims filed did not exhibit any eligibility warning signs and these claims are expected to be processed immediately with the first payments expected in late summer 2024. Second, the IRS found that between 60 percent and 70 percent of the claims filed showed an unacceptable level of risk — enough to not process the claim, but not enough to outright deny the claim. The IRS will be conducting an additional review of these claims before making a final determination. Finally, the IRS found that between 10 percent and 20 percent of the claims filed exhibited clear eligibility warning signs, and these claims are expected to be denied immediately.

At this point in time, business owners who have pending ERTC claims do not need to take any action and should await notification from the IRS. It is important to note that only ERTC claims filed prior to the IRS’s Sept. 14, 2023 processing moratorium will be categorized and either processed or denied at this time. Claims filed after that processing moratorium will remain in queue.

The IRS has asked for patience as it works through its ERTC claim backlog but, in the meantime, encourages business owners who have pending ERTC claims to review the ERTC guideline checklist on the IRS’s website and talk to trusted legal and tax professionals to confirm whether they are in fact eligible for the ERTC. The IRS also encourages business owners to use the special IRS withdrawal program if, after review, eligibility for the ERTC is questionable or worse. The IRS’s withdrawal program allows business owners to both request that the IRS not process an ERTC claim for any tax period that has not yet been paid and return an ERTC check that has been received but not yet cashed or deposited and withdraw the claim as though it had never been filed — both of which can avoid the imposition of penalties and interest. The IRS is also considering reopening its ERTC Voluntary Disclosure Program at a reduced rate. A decision is expected in the coming weeks.

Frank C. Mayer is a member (partner) in the Albany office of Syracuse–based Bond, Schoeneck & King PLLC. He is a business law attorney whose primary areas of practice include corporate and business law, tax planning for closely held, manufacturing and service businesses, estate planning and estate administration with a concentration in tax-related matters. Contact Mayer at fmayer@bsk.com. Jessica M. Blanchette is an associate attorney in Bond’s Albany office. Her law practice comprises corporate and business law, property law, and tax-law matters. Contact Blanchette at jblanchette@bsk.com. This article is drawn and edited from Bond’s website.

Storm damage in Canastota consistent with a tornado, National Weather Service confirms

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WAMPSVILLE, N.Y. — The National Weather Service in Binghamton confirmed Thursday that the damage in Canastota from Tuesday’s big storm is consistent with a tornado

Project to protect Oswego’s Camp Hollis from future flooding is now complete

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OSWEGO, N.Y. — A construction project to protect Camp Hollis in the town of Oswego from future flooding and high-water events is now complete. Camp Hollis is a summer camp for children, providing recreational opportunities to more than 2,000 at-risk youth per year, as well as a location for private events. The completed resiliency project

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OSWEGO, N.Y. — A construction project to protect Camp Hollis in the town of Oswego from future flooding and high-water events is now complete.

Camp Hollis is a summer camp for children, providing recreational opportunities to more than 2,000 at-risk youth per year, as well as a location for private events.

The completed resiliency project stabilizes nearly 600 feet of Lake Ontario shoreline and prevents further erosion and encroachment of the bluff toward the camp’s facilities, the office of Gov. Kathy Hochul announced Wednesday.

The state awarded the $500,000 project to Oswego County through the Lake Ontario Resiliency and Economic Development Initiative (REDI). Wave and horizontal ice pressure, generated by severe storms, “continuously eroded” the toe of the bluff causing sloughing and intrusion of the bluff in toward Camp Hollis’s playing field and facilities and “creating a hazardous condition” for camp visitors.

The project’s resiliency features include the installation of an onshore riprap revetment system with a regraded slope. In addition, crews added vegetation between the revetment and the slope to minimize potential erosion loss and protect the toe of the bluff. The New York State Department of Environmental Conservation (DEC) oversaw the county’s implementation of the project.

“It’s great to see this important project completed at Camp Hollis. The shoreline stabilization will secure its longevity, guaranteeing this facility will provide an outlet for kids of all ages to continue to partake in summer camp experiences,” New York State Assembly Minority Leader Will Barclay (R–Pulaski) said in the state’s announcement. “The investment from the state has ensured the Lake Ontario shoreline remains sound, and it will prevent further erosion. I look forward to seeing the positive impact this has on Camp Hollis and the community.”

The project “further supports” Hochul’s “Get Offline, Get Outside” initiative, which was launched earlier this month, her office said. It seeks to promote physical and mental health by helping New York’s kids and families to put down their phones and computers, take a break from social media, and enjoy recreation and outdoor social gatherings.

MVHS announces new chief operating officer

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UTICA, N.Y. — Mohawk Valley Health System (MVHS) has announced the hiring of William W. LeCates as chief operating officer (COO). As COO, LeCates is responsible for clinical-support services, operational-support services, supervising MVHS product lines, and working closely with quality and medical education. He joins MVHS from JPMorgan Chase, where he provided clinical oversight of

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SHA, HUD make local announcement about $50 million to help redevelop Syracuse public housing near I-81

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SYRACUSE, N.Y. — A late Wednesday morning ceremony at Wilson Park in Syracuse included the unveiling of a big check with a big dollar amount. The U.S. Department of Housing and Urban Development (HUD) on Wednesday delivered $50 million for the upcoming East Adams neighborhood transformation project. William Simmons, executive director of the Syracuse Housing

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SYRACUSE, N.Y. — A late Wednesday morning ceremony at Wilson Park in Syracuse included the unveiling of a big check with a big dollar amount.

The U.S. Department of Housing and Urban Development (HUD) on Wednesday delivered $50 million for the upcoming East Adams neighborhood transformation project.

William Simmons, executive director of the Syracuse Housing Authority (SHA), called it an “exciting” time and one that’s filled with “gratitude” for the SHA’s redevelopment project at both Pioneer Homes and McKinney Manor, both located just west of the elevated viaduct of Interstate 81 (I-81).

“It’s been a process that’s been in the works for over 10 years now and getting to the point where we’re starting to receive some of the federal and state dollars and to make the project come to fruition is very exciting,” Simmons said to open the ceremony.

This funding comes through the HUD’s Choice Neighborhoods Initiative program, U.S. Senate Majority Leader Charles Schumer (D–N.Y.) and U.S. Senator Kirsten Gillibrand (D–N.Y.) said in a joint announcement back on July 12.

The lawmakers called the grant “one of the largest single federal housing investments in Syracuse’s history.”

Simmons called it “a great deal of opportunity” that’s going to be happening in demolishing the current 675 units and replacing them with more than 1,400 units of mixed-income housing along with the Children’s Rising Center.

“As you can imagine, it’s a project that [is] going to be transformative and very impactful for our residents, for the city of Syracuse, and actually for the region because it’s all happening in partnership with the I-81 infrastructure coming down, so we want to acknowledge all of that,” Simmons said.

He went on to recognize various partners in the project that include the City of Syracuse; Onondaga County; St. Louis, Missouri–based McCormack Baron Salazar, SHA’s developer; Urban Strategies; Blueprint 15; New York State Department of Housing and Community Renewal; and the Syracuse City School District.

Blueprint 15 is a nonprofit organization that’s “working with residents, community partners and local leaders of the old 15th ward to reconnect and rebuild what was once a vibrant and thriving neighborhood,” per its website.

The speakers at Wilson Park also included Richard Monocchio, principal deputy assistant secretary for public & Indian housing at HUD.

“I’ve seen a lot of these projects all over the country, and they are amazing. But it doesn’t happen without that resident, on-the-ground involvement helping us design this and being involved the whole way,” Monocchio said in his remarks. “Not only because it’s the right thing to do … because it brings everybody else that lives here together. We’re giving you something better, and you’re building confidence and you’re building hope.”

The speakers at Wilson Park also included U.S. Representative Brandon Williams (R–Sennett); a representative from Sen. Schumer’s office; and Tara Harris, a Syracuse Housing Authority resident.

Severe storm spreads damage across Rome

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ROME, N.Y. — The city of Rome continues to clean up from a devastating, confirmed tornado that struck on Tuesday afternoon, July 16. The storm

SUNY launches venture-capital fund for startups on a SUNY campus

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SYRACUSE, N.Y. — SUNY officials on Monday announced the launch of Upstate Biotech Ventures, a “first-of-its-kind” venture-capital fund for startups and small businesses on a SUNY campus. Dr. Mantosh Dewan, president of Upstate Medical University, announced the fund during an afternoon ceremony at Upstate Medical’s CNY Biotech Accelerator at 841 E. Fayette St. in Syracuse.

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SYRACUSE, N.Y. — SUNY officials on Monday announced the launch of Upstate Biotech Ventures, a “first-of-its-kind” venture-capital fund for startups and small businesses on a SUNY campus.

Dr. Mantosh Dewan, president of Upstate Medical University, announced the fund during an afternoon ceremony at Upstate Medical’s CNY Biotech Accelerator at 841 E. Fayette St. in Syracuse.

SUNY established the $6 million fund with a $3 million capital investment from Empire State Development’s Community and Regional Partner Fund, part of the State Small Business Credit Initiative through the U.S. Treasury. Upstate Medical University also provided a $3 million allocation through the SUNY Research Foundation.

“Upstate Biotech Ventures will provide critical early-stage venture capital for startups commercializing game-changing life sciences and biotech innovations,” Dr. Mantosh Dewan, president of Upstate Medical University, said in the SUNY news announcement. “This $6 million investment fund will be the initial vehicle for investing in professionally vetted, high potential start-ups and small businesses affiliated with our campus. With Upstate Biotech Ventures, we are clearly hanging out a Made in New York sign right here in the heart of New York.”

Excell Partners, an early-stage venture capital fund, will manage Upstate Biotech Ventures and will invest in “high-potential” startups and small businesses affiliated with Upstate Medical University to “drive research and technology innovation.”

The initial funding of $6 million is expected to help support nearly 20 companies with investments ranging from $100,000 to $1 million. The fund will give preference to businesses led by founders from traditionally underrepresented groups.

Those attending the ceremony included SUNY Chancellor John King, Jr.

“SUNY plays a crucial role in New York State’s economic development, by educating generations of leaders and professionals, and by supporting business across our state through investment and infrastructure,” King said in the SUNY announcement. “Venture capital provides us with another tool to drive research and innovation, and I am grateful for the partnership with Empire State Development in establishing Upstate Biotech Ventures. As SUNY works to double research across our system of colleges and universities, I hope other campuses have the opportunity to consider the path mapped out by Upstate Medical University.”

Attendees also included Hope Knight, CEO and commissioner of Empire State Development; Melur (Ram) Ramasubramanian, SUNY executive vice chancellor for academic affairs and provost and president of the SUNY Research Foundation; and Theresa Mazzullo, CEO of Excell Partners.

Oswego Health says first robotically assisted surgery performed at its surgery center

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OSWEGO, N.Y. — Oswego Health says it had the system’s first robotically assisted surgery using the recently purchased da Vinci Xi surgical system. Dr. Kenneth Cooper — a robotically trained bariatric surgeon with the Center for Weight Loss & Surgery — was the first to use the da Vinci Xi system at Oswego Health’s surgery

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OSWEGO, N.Y. — Oswego Health says it had the system’s first robotically assisted surgery using the recently purchased da Vinci Xi surgical system.

Dr. Kenneth Cooper — a robotically trained bariatric surgeon with the Center for Weight Loss & Surgery — was the first to use the da Vinci Xi system at Oswego Health’s surgery center, the health system announced.

“This additional surgical option will improve clinical outcomes and has significant advantages to our patients,” Cooper said in the announcement. “I’m thrilled that Oswego Health has made this investment as we strive to improve the health and well-being of the communities we serve.”

Its creator designed the da Vinci Xi system to further advance the technology used in minimally invasive surgery. A surgeon can use the system across a spectrum of minimally invasive surgical procedures. It has also been optimized for multi-quadrant surgeries performed at Oswego Health in the areas of bariatric, general surgery, and urology, the health system noted.

The da Vinci Xi system provides the precision and visibility needed to take on more complex procedures via remotely operated surgical tools that are inserted through small incisions in the patient. Benefits of robotic surgery include shorter post-surgery hospital stays, faster recovery times, lower probability of complications, and less need for opioid painkillers.

“At Oswego Health, we care about making investments in patient care. The da Vinci System is state-of-the-art technology that will extend our surgeons’ capabilities in a way that will be safer, less invasive, and more efficient,” Michael Backus, president & CEO of Oswego Health, said in the health system’s announcement. “I expect that our patients will notice the results and this will be another step for Oswego Health to demonstrate the quality of healthcare offered in our hospital. Expanding into robotic surgery at Oswego Health allows us to continue our commitment to be the very best for our patients.”

Tioga State Bank to open Johnson City branch

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JOHNSON CITY, N.Y. — Tioga State Bank (TSB) will open a new branch in Johnson City later this summer. It will be the bank’s fifth location in the greater Binghamton area, where it already has two branches in Binghamton, one in Vestal, and one in Endwell. “We are thrilled to open this office in the

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