Navigating disability benefits can be incredibly complex for those who need help the most. The Social Security Administration (SSA) doesn’t make the process easy for applicants or current beneficiaries. For new business owners, they may ask themselves, “Can you own an LLC while receiving disability benefits in North Carolina?”
Experienced Disability Lawyer in North Carolina
Often, those seeking help find themselves listening to lengthy automated messages when calling their local SSA office and hours-long hold times. They may even find that their call is hung up after a certain amount of time. Trying to find answers online can be even more challenging.
The SSA website claims to have the answers, but it will give vague information that can leave beneficiaries or applicants confused. It’s important to hire a disability lawyer to help you navigate this complex system and fight on your behalf.
Attorney Helton of Law Office of Lyndon R. Helton, PLLC, has over 23 years of legal experience. He feels the same anger that you do about the manipulative tactics used by SSA to make the process difficult for applicants.
In 2020, there were 530,039 denials for disability benefit applicants. However, this is a strategy used by SSA to make most applicants give up and not appeal the denial. For those who are self-employed, this process is even more complex.
Social Security Disability Laws and Rules
Around 13% of North Carolinians live with a disability. Most of these residents are unable to work and yet are also denied disability benefits. While you can own an LLC and receive disability benefits, the process of self-employment is different from that of a W-2 worker.
SSA doesn’t just look at how much money you earn as a self-employed person. They also look at your work activity to decide whether you are doing “substantial gainful activity.” This is essentially the value of your work. SSA uses three tests to determine this:
- If you provide important services for your business and earn a significant income from it
- If the work you do is similar in time, skill, effort, and responsibility to that of people without disabilities doing the same type of work in your community
- If your work is not the same as others but is still clearly worth the amount SSA sets in its earnings guidelines
It’s common for applicants to hire lawyers to try to help them fight these rulings. If you receive Social Security Disability Benefits, you usually keep getting them as long as you remain disabled. However, your benefits can stop if your health improves enough for you to work, or if you start working and earn too much.
Social Security Case Review and How It Affects Business Owners
Social Security is required by law to review your case from time to time. This is called a continuing disability review. The timing depends on your medical condition:
- If improvement in your medical condition is expected, you may be reviewed within 6 to 18 months.
- If improvement is possible, you may be reviewed about every 3 years.
- If improvement is not expected, reviews typically happen every 7 years.
During these reviews, your benefits may be suspended or stopped for two main reasons:
- You complete a 9-month trial work period and then earn at a level considered “substantial.” In 2025, self-employment earnings over $1,620 a month are considered to be substantial. This number rises to $2,700 if the applicant is blind. During the 36-month period after your trial work period, your benefits will stop if you earn above that limit, but they can start again if your income drops.After 36 months, benefits end if you keep earning above the limit.
- Social Security decides your medical condition has improved and you are no longer disabled.
No matter what, you are required to report changes in your condition or if you start working or become self-employed.
FAQs
Q: Does Social Security Count All the Money That Comes Into My Business?
A: When you run your own business, Social Security does not look at the total amount of money your business brings in. They focus on your net earnings. They’ll use the profit you report on your tax forms, then multiply it by about 92%.
This is done because regular employees only pay half of their Social Security tax, while self-employed people pay the full amount. SSA will use this adjusted number when deciding if your income affects your disability benefits.
Q: What Is the Impairment-Related Work Expense?
A: Social Security has work incentives that are designed to help people with disabilities try working without immediately losing their benefits. One work incentive is called impairment-related work expenses.
These are costs you must pay for items or services that you need to work because of your disability. SSA will subtract these costs from your business earnings. This may reduce your countable income below the SGA level so you can keep your disability benefits.
Q: What Is an Owner’s Draw, and How Does It Affect My Disability Benefits?
A: If you take money out of your business account each month, that is called an “owner’s draw.” An owner’s draw is not the same as a salary. It can be money, goods, or services that you take out of the business for yourself. Even if you leave money in the business account or take it out, what matters to Social Security is the net profit the business makes, not the withdrawals.
Q: If I Own an LLC and Use Other Government Benefits, Will I Lose Them?
A: If you are on SSI, Medicaid, SNAP, or receive Section 8 housing assistance, becoming self-employed does not automatically mean you will lose all your benefits. Many public benefit programs allow people with disabilities to earn income from self-employment. However, each program looks at your earnings differently. It’s important to read each program’s specific rules.
Hire a Disability Lawyer to Fight for Your Rights
Attorney Helton of Law Office of Lyndon R. Helton, PLLC, has years of experience assisting disabled business owners throughout Burke County, Catawba County, Caldwell County, and surrounding towns. Contact our team today to learn how we can help you during this difficult time. We’ll be able to listen to every detail of your situation and seek legal options that will benefit your needs.
