Legal Question in Business Law in Pennsylvania

Re: How to claim profit from a partnership

From a state website regarding SSDI benefits.

Proving Disability for Adults

In deciding whether you have a disability, SSA uses a five-step analysis:

Step One: If you are working and performing substantial gainful activity, then you are considered able to work and therefore not "disabled." If your average monthly earnings are over $700 per month, you are probably not eligible. If you are not earning significant income, proceed to step two.

Step Two: You must have a "severe impairment." This means that you must have a medical problem which significantly limits your physical or mental ability to perform basic work activities. If you have a severe impairment, proceed to step three.

Step Three: Social Security has determined that certain medical conditions are automatically disabling. Social Security describes these conditions in a part of their regulations called the "Listing of Impairments." To be considered "disabled" under the Listings, you need to have the required type of medical proof and the indicated level of severity for your particular illness.

If you have impairments that are similar but not identical to those included in the Listings, or if you have a combination of illnesses, SSA will consider you "disabled" if your condition is considered to be "comparable" to those included in the listings, and is of equal severity.

If your condition does not meet or equal one of the conditions in the Listings, proceed to step four.

Step Four: If you are physically and mentally able to return to a job that you have held within the last fifteen years, then SSA considers you "not disabled." In general, SSA considers only those jobs which you held for more than a few months and in which you earned over $300 per month. If you cannot perform any of your past jobs, proceed to step five.

Step Five: If you cannot perform your past work, then Social Security decides whether you are able to perform other types of work.

At step five, SSA will consider your physical limitations, your age, education, the type of work skills you have acquired, and any mental limitations on work activities.

The main question is if the income is passive or earned income. The IRS takes a dim view of individuals taking solely as profits income from a business where there is business activity taking place. For example if you work 250 hours per year, the type of work you may be performing might be reasonably valued at $10/ hour or $2,500 leaving $2,500 as partnership income. Above everything else do not mislead the SS people they can probably help you structure your payments to avoid problems.