What happens if you die in July after earning $25,000?

To determine how many credits you earn from your earnings after working in a given year, one must understand the Social Security earnings limit for credits. For 2023, an individual earns one credit for every $1,640 in covered earnings, up to a maximum of four credits per year.

Given that the individual earned $25,000 before dying in July, we first need to calculate how many credits this income translates into.

Starting with the total earnings, the number of credits earned can be determined by taking the total income and dividing it by the amount required for one credit:

$25,000 ÷ $1,640 = approximately 15.24. Since credits cannot be fractional, this means that the individual would earn the maximum allowable credits for the year, which is four.

Under the rules of the Social Security Administration, half of the year's credits can be earned if the individual worked for only part of the year and meets the necessary earning threshold. In July, having earned $25,000 is sufficient to secure those four credits. Since the question asks for credits based on earnings and not the time worked, even though the individual died in July, the credit accumulation still reflects the total income earned up to that point.

Thus