Boeing Offered 17,000 Workers a 32% Raise. A Retired Engineer’s Union Strike Check Can Count as $0 Toward Social Security’s Earnings Test
A Boeing engineer on strike can collect tens of thousands in union payments and watch the Social Security earnings test treat nearly every dollar as though it never existed, yet the IRS tells a completely different story come tax season.
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Boeing (NYSE:BA | BA Price Prediction) has an improved contract offer in front of its largest white-collar union, and the vote is coming up. If members turn it down a second time, roughly 17,000 engineers and technical workers could walk out as soon as Oct. 7, the day after their current contracts expire. Boeing workers went on strike in 2025 in a standoff that lasted for several months.
Consider a hypothetical 64-year-old Boeing engineer who took Social Security early and kept working is a useful example. Every paycheck counts toward the retirement earnings test, the rule that cuts benefits for people under full retirement age (FRA) who earn too much. A strike ends those paychecks. His union sends strike benefits instead.
Ordinary union strike benefits generally don’t count as wages, even if the worker walks a picket line. The IRS can still tax that same money.
One Union Check Gets Two Very Different Answers
IRS Publication 525 treats strike and lockout benefits as taxable income. Ordinary strike benefits are not wages, whether the worker pickets or stays on call, per Social Security.
That means one payment can land three ways:
- Federal taxable income: usually yes.
- Wages counted by Social Security: generally $0.
- Earnings-test amount: generally $0.
One exception: if a union pays separately for picket or strike duties, that pay counts as wages once it reaches at least $100 in the calendar year. Ordinary strike benefits stay outside that category.
How $15,000 in Strike Benefits Can Count as $0
Back to our engineer. Say he earned $20,000 in wages before the walkout and then collects $15,000 in union strike benefits. He took in $35,000 in cash, but his wages for the earnings test generally stay at $20,000.
For 2026, the limit for someone under full retirement age (FRA) all year is $24,480. Above that, Social Security holds back $1 for every $2 earned over the line. At $20,000, he’s below the limit and loses nothing under the annual test.
Change one detail and the result flips. If the same $15,000 had been regular salary, his countable earnings would be $35,000. That’s $10,520 over the limit, and the annual formula could withhold $5,260 in benefits. He’d have the same cash in hand with a very different Social Security outcome.
Income withheld under the earnings test isn’t permanent. Social Security recalculates his benefit to credit the months it held back after he reaches full retirement age.
Your Tax Return Still Counts Every Strike Dollar
The IRS treats strike benefits as taxable, raising adjusted gross income (AGI) even though Social Security ignores them for the earnings test. For someone getting benefits, that matters in a second way.
For single filers, up to 50% of Social Security benefits can become taxable once combined income passes $25,000; for married couples filing jointly, the threshold is $32,000.
Above $34,000 for single filers, up to 85% of benefits can become taxable; for married couples filing jointly, the second threshold is $44,000.
A Long Strike Can Change Who Gets Withheld
A strike trades weeks of countable salary for union benefits that generally don’t count as wages. For a worker already close to the $24,480 limit, that trade could decide whether any benefits get withheld this year. Striking doesn’t give anyone a Social Security advantage on its own. The outcome depends on how much salary came in before the walkout and on the size and type of each union payment.
Five Details to Confirm Before Counting on $0
- Payment type: Find out whether each check is an ordinary strike benefit or separate pay for strike duties. The two are treated very differently.
- Year-to-date wages: Add up your salary from January through the last day before the strike. Your earnings-test exposure starts from that figure.
- Picket payments: Ask the union whether it pays anything separately for services. Once that pay reaches $100 for the year, it can count as wages.
- Tax reporting: Learn how the union will report your benefits so nothing on your return comes as a surprise.
- Combined income: Estimate whether taxable strike benefits push you past the $25,000 or $32,000 limits and make more of your Social Security taxable.
If you’re taking Social Security early, work through that checklist before a walkout begins, not after the first union check arrives.
Contact [email protected] for any questions or corrections.
Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
