Problem with SSA-1099 Social Security Benefit Statement

[Cathy]

I've had a long time client who in 2014 went with her husband to sign up for benefits.  He had met his FRA, she would be 62 within a couple of months of their visit.  She was still working earning approximately $22,500 per year with little hope of her wages increasing.  Yes, she was earning over the allowed amount each year, however, taking into consideration her earnings versus her allowance, she still would have received checks, although reduced.

She received correspondence to confirm above and called SS.  The employee she talked to suggested she might want to wait to draw her social security until she reached FRA so her checks wouldn't be reduced.  She agreed and has not received any SS checks at all.

This year,  however, she received an earnings statement (SSA-1099) in her name saying that her Net Benefits for 2016 were approximately $6,400 (Box 5).  The statement went on to say that she was paid by check or direct deposit.  A note at the bottom includes:  *$5,500 paid in 2016 for 2015.

She called SS and was told not to worry about getting the SSA-1099 for 2016 as it wouldn't affect her 2016 income taxes (her and her husband's income would definitely make her SS benefits she "supposedly" received as taxable income (85% of it anyway).

I have NEVER, EVER seen this before.  Is there something I am missing or is it a case of identity theft possibly?

 

Thanks!

 

 

 

 

 

[Lion EA]

Have her check her bank statements to see if she received direct deposits.

Years ago before DD was required, I had a friend who didn't get checks in a couple months.  She contacted SSA, and they issued new checks.  Turns out her hubby thought the original checks were his, so he deposited them.  When the SSA realized the checks had cleared in hubby's account, they wanted the money back, obviously.  Struck a deal to withhold it gradually from benefits, so all ended well.

[Cathy]

Thanks, Lion.  I have already given her the homework for tonight, and hopefully she will find something in one of their accounts.  Your reply does confirm I'm on the right track though and I appreciate it!  Unless the SS employee immediately noticed it was identity theft right away and tried to hide it from my client, I can't imagine why in the world she would tell my client what she did.  It'll all come out in the wash as the client is coming back to the office tomorrow and she'll call SS again and let me speak with the representative......but hopefully she'll find the extra money in her account.  Still doesn't explain why they would only pay her $800 for 2016, but nothing about this make sense anyway, so we'll have to wait and see.

Thanks again, Lion!

 

[easytax]

In response to your statement --- your client has a bigger problem --- SS has her starting her payouts BEFORE turning full retirement age.   From your statement, that is not what happened. If she received 2015 benefits -- that would cause an early reduction to full benefit.      If that is the case, she needs to bring this up and see if SS allows payback and CORRECT start for when she turns FRA (or she is stuck with diminished benefits).

Once she is talking to SS, might as well address all issues.