Client receives Teachers Retirement instead of social security. Also has a CRP. Does anyone know if they have to pay SE tax since it's teacher's retirement and not social security?
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No SE
There certainly would not be an SE tax on retirement income. Nor is there SE tax on Social Security income. There is no employment status at all, they are retired.
A teacher's contributions and the school's contributions would both have been subject to FICA and Medicare withholding when still teaching. Note the difference between the amounts of boxes 1,3 and 5 for an active teacher. It is however subject to taxation since it was deferred income at the time. Some states I believe give tax breaks on a teacher's retirement income paid through the state.
As to the CRP question...what is the question? Is that a "Certificate of Rent Paid", as is common in Minnesota? -
CRP receipients usually have to pay SE tax unless...
Conservation Reserve Program (CRP) payments. If you received social security retirement or disability benefits in addition to CRP payments, the CRP payments aren't subject to self-employment tax. You will deduct these payments from your net farm profit or loss on Schedule SE (Form 1040), line 1b. Don't make any adjustment on Schedule F (Form 1040).Comment
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