Over the years, here at the AMAC Foundation’s Social Security advisory service, we have fielded many questions from veterans about something known as a “Special Extra Credit for Military Service.”  Those who contact us are usually informed of this seemingly mysterious Social Security benefit by talking to other veterans, or veterans’ organizations.  And many erroneously believe that, because they served in the military, they are entitled to a larger Social Security benefit as a result of that service. Well, that is sometimes true but often not, so it’s time to clear up this frequently misunderstood Social Security rule for those who have selflessly served our country.

SS Taxes on Military Pay

For starters, be aware that Social Security “FICA” payroll taxes have been withheld from military pay since 1957. And, because the military deducts these Social Security contributions from your pay, that information is also provided to the Internal Revenue Service (IRS). The IRS, in turn, provides your military earnings information to the Social Security Administration (SSA) to be considered as part of your SSA lifetime earnings, from which your eventual monthly Social Security benefit amount will be calculated.

Although SS FICA taxes began for military service members in 1957, it wasn’t until in January 1968 that Social Security enacted a special rule which provided special extra earnings credits for those who served. As a result, those who served may have extra earnings added to their military pay as a bonus, to be used when calculating their Social Security benefit.

What are the “Special Extra Credits for Military Service?”

When the 1968 law was first enacted, the rule provided for an extra $300 in military earnings for each quarter (3-months) of active duty after 1957, to a maximum of $1,200 in additional military earnings per year. The methodology to compute the special extra earnings credit changed in 1978 to provide $100 extra earnings for every $300 of active duty pay, up to a maximum of $1,200 per year extra earnings credit.

Prior to 1968 (when SSA began identifying earnings from military service[1]) those who served between 1957[2] and 1967 had to notify Social Security of their military service to get the special extra earnings credit when applying for SS benefits. This was usually done by providing SSA with a copy of their DD-214 (discharge papers). The application for Social Security benefits was also changed to inquire about military service, and SSA representatives were instructed to ask if the SS applicant was a military veteran. For those who served in 1968 or later, the special extra earnings credits are automatically added to their actual miliary earnings when their SS benefits are calculated.[3]

In 2002, Congress completely eliminated special extra earnings credits for military service for those who served after 2001, thus these special extra earnings credits are no longer available to later service members. 

The Current Rules

Considering the above, the current rules for special extra earnings for military service are:

• For military service prior to 1957: an extra $160 is added to your SSA earnings record for each month of active duty service
• For service between 1957 and 1977: an extra $300 is added to your earnings for each quarter of active duty service; maximum $1,200 additional earnings credit
• If you served between 1978 and 2001, SS adds an additional $100 of earnings for every $300 in actual military active duty pay; maximum of $1,200 in additional earnings credit
• If you served after 2001:  no special extra earnings for military service are awarded.

There are, of course, several nuances to the rules, including that you must have been honorably discharged or released from military service under conditions other than dishonorable after at least 90 days of service.

A Key Consideration

A key point to consider is this: even if you are eligible for them, the “special extra credits for military service” will only affect your military earnings record during your service years – they do not mean a higher Social Security monthly amount just because you served in the military. Indeed, if you had only a short military enlistment, followed by long lifetime career working in civilian employment, it’s unlikely these extra credits will have any effect on your monthly Social Security benefit when you apply. And here’s why:

Social Security retirement benefits are always based upon the highest-earning years over your lifetime. When you apply for SS benefits, Social Security will look at your lifetime earnings (including earnings in your military years), adjust them for inflation, and select only the 35 years in which you earned the most to determine your monthly SS payment. If any of your military years are among your highest earning years in your lifetime, they will be automatically included when calculating your SS benefit amount. But if the highest earning years over your lifetime were from employment outside the military, then those “special extra credits for military service” will have no effect on your Social Security retirement benefit.

What Should You Do?

If you are uncertain whether Social Security considered your military earnings when determining your SS benefit, consider this:

• If you served after 2001, you are not entitled to any special extra credits for military service.
• If you served between 1957 and 2001, get a copy of your lifetime earnings record from the Social Security Administration (You can get this by asking for it at your local SS filed office or by calling 1.800.772.1213. You can also get it online at your personal “my Social Security” account at www.ssa.gov/myaccount).
• If you served between 1968 and 2001, verify that your military earnings are present for years you served. If so, Social Security has already considered your military earnings when calculating your SS benefit. If not, contact Social Security to correct your military earnings record.
• If you served prior to 1968, determine from your SS earnings record whether your military earnings are recorded for the years you served. If they are, it is likely that Social Security manually included your special extra earnings credit when calculating your monthly benefit (as their application process requires).
• If you served prior to 1957, provide Social Security with a copy of your DD-214 to confirm you received any special extra credit you are entitled to for your military service.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (www.amacfoundation.org/services) or email us at ssadvisor@amacfoundation.org. Because we are a non-profit organization, our services are free.

[1] Detection began by using the military Employer Identification Number (EIN) assigned to IRS earnings for military service members.

[2] Those who served prior to 1957 and, thus, did not have SS tax withheld from their military pay, were provided with separate extra earnings credit for military service of $160 for each month of active duty.

[3] Your military W-2 submitted to the IRS has an Employer Identification Number (EIN), from which SSA can determine that your reported earnings resulted from your military service.