953.1 What are deemed wage credits?
A member of a uniformed service may have wage credits in addition to basic pay received for active duty or active duty for training. These credits are subject to the maximum earnings limitation on income taxable for Social Security purposes. These “deemed wage credits” are granted in recognition of the fact that covered basic pay is increased by various allowances that are part of the actual reimbursement for services.
953.2 How are deemed wage credits granted?
You are granted deemed wage credits as follows:
For years 1957 through 1977, you are granted $300 for each calendar quarter that you receive any basic pay.
For years 1978 through 2001, you are granted credits in increments of $100 up to a maximum of $1,200 per calendar year. The $100 increments are granted for each full $300 of basic pay. No credit is granted if your annual wages are less than $300 and no further credit may be granted when the annual wages exceed $3,600.
Effective 01/01/02, deemed wage credits are eliminated for all years after calendar year 2001. Deemed wage credits will continue to be given for military wages for periods prior to calendar year 2002.
953.3 When are deemed wage credits NOT granted?
After September 7, 1980, wage credits may not be granted to service members discharged or released from active duty before completing the minimum active duty requirements. Therefore, wage credits will not be granted:
After September 7, 1980, if you were initially enlisted in a regular component of the Armed Forces and:
You did not complete at least 24 months of your enlistment; or
The full period of active duty you were called upon to serve was less than 24 months, unless you were discharged due to:
Hardship as specified in section 1173 of Title 10 of the U.S. Code;
The application of section 1171 of Title 10 of the U.S. Code (commonly referred to as “for the convenience of the government”);
Disability under certain circumstances; or
Death during the period of enlistment;
Your entry on active duty occurred after October 13, 1982, in a regular component of the Armed Forces and:
You did not previously complete a continuous period of active duty of at least 24 months; or
You were discharged or released from active duty before completing the lesser of 24 months or the full period of the tour of active duty being served unless the individual was discharged or released from active duty due to:
hardship as specified in section 1173 of Title 10 of the U.S. Code;
the application of section 1171 of Title 10 of the U.S. Code (commonly referred to as “for the convenience of the government”);
disability under certain circumstances; or
death during the period of enlistment.
Last Revised: Aug. 9, 2006