In most cases, the Social Security Administration considers income received from mineral rights “unearned income.” Collecting royalties will not affect your disability status like working at a job does. All but the smallest royalties can affect your SSI benefits.

What is considered unearned income for Social Security?

Unearned Income is all income that is not earned such as Social Security benefits, pensions, State disability payments, unemployment benefits, interest income, dividends and cash from friends and relatives.

How does mineral royalties affect Social Security benefits?

Effects on SSI. When you receive more than $60 per quarter from unearned income such as mineral royalties, your SSI benefit will be adjusted. In most cases, the excess royalties will be subtracted, along with all of your other earned and unearned income, from the current federal benefit rate.

When is royalty income subject to Social Security tax?

When Royalty Income is Taxable. When you write a book or lease out your land to an oil company, you report the royalties on Schedule E, for supplemental income or Schedule C for self-employment tax. If you report book earnings on Schedule E, for instance, you pay income tax but not Social Security tax.

How does royalty income affect your disability benefits?

If your income is more than this, then you will no longer be able to collect your disability benefits. While it’s fairly easy to stay under these limits, it’s a little more challenging when it comes to royalty income. Does Royalty Income Affect Your Disability Benefits?

How are royalties calculated in the SSA poms?

Royalty compensation may be expressed as a percentage of receipts from using the property or as an amount per unit produced. To be considered royalties, payments for the use of natural resources also must be received: