Student Earned Income Exclusion 2026

2026 SEIE Amounts

The Student Earned Income Exclusion for 2026 allows eligible students receiving SSI to exclude up to $2,410 per month from countable earned income, with an annual cap of $9,730. These figures adjust each year with the cost-of-living increase.

What that means in practice: a student who earns $2,000 per month at a part-time job has zero countable earned income for SSI purposes. Their SSI check stays at the full amount. Without the SEIE, that same $2,000 would reduce the SSI payment substantially — after the standard earned income exclusions, roughly half of earned income above $65 per month gets deducted from the SSI benefit.

Who Qualifies

The SEIE is available to SSI recipients who are:

• Under age 22, and
• Regularly attending school

"Regularly attending school" includes enrollment in a public or private school at the secondary level (grades 7-12), college or university (for at least 8 hours per week), or a vocational or technical training program (for at least 12 hours per week in a course lasting at least 12 weeks). It also covers home-schooling at the secondary level that meets state standards.

The definition matters for Montana's disability transition timeline because the 2025 Disability Rights Montana v. Hedalen settlement now allows students with disabilities to remain enrolled in public school until age 22. A 20-year-old still attending a Montana high school under an IEP qualifies for the SEIE — even though they're well past the typical graduation age.

Students in Pre-Employment Transition Services (Pre-ETS) programs through Montana's Vocational Rehabilitation and Blind Services (VRBS) also qualify, provided they're simultaneously enrolled in school. The VRBS-arranged work experiences and internships generate earned income that the SEIE can shield.

How the Math Works

SSI has a specific order of operations for income exclusions. Understanding it prevents the common panic that any paycheck means lost benefits.

Start with the student's gross monthly earnings:

1. Subtract the $20 general income exclusion (applies to unearned income first, but any unused portion rolls to earned income)
2. Subtract the $65 earned income exclusion
3. Subtract the SEIE (up to $2,410 in 2026)
4. Divide the remainder by 2 — SSI reduces the benefit by $1 for every $2 of remaining countable earned income

For a Montana student earning $1,800 per month: after the $20 and $65 exclusions ($1,715 remaining), the SEIE wipes out the entire balance. Countable earned income: $0. SSI benefit: unchanged.

For a student earning $2,800 per month: after the $20 and $65 exclusions ($2,715), subtract the $2,410 SEIE ($305 remaining), divide by 2 ($152.50). The SSI check drops by about $153 that month — not by $2,800.

Once the annual SEIE cap of $9,730 is reached partway through the year, the monthly exclusion stops applying. At that point only the standard $20 and $65 exclusions remain, and SSI reductions from earnings become much more significant. Families should track the annual running total carefully.

Reporting Wages to the SSA

The SSA requires monthly wage reporting for SSI recipients who work. In Montana, this can be done through:

• SSI Telephone Wage Reporting at 1-866-772-0953
• my Social Security online portal at ssa.gov
• In person at the nearest Montana SSA field office (Billings, Great Falls, Helena, Missoula, Butte, or Kalispell)

Report wages promptly. Late reporting is the most common cause of SSI overpayments — the SSA continues paying the full benefit, then retroactively demands repayment once it discovers the unreported income. Overpayment recovery can reduce future SSI checks by up to 10% until the balance is repaid.

Impairment-Related Work Expenses

Beyond the SEIE, students with disabilities can also deduct Impairment-Related Work Expenses (IRWE) from countable income. IRWE covers out-of-pocket costs directly related to enabling the person to work: transportation to a job that regular transit can't serve, specialized equipment, job coaching fees, medication side-effect management, and attendant care needed specifically for work activities.

IRWE deductions are subtracted from gross earnings before the SSI formula kicks in, and they're available regardless of age — so they remain useful after the student ages out of the SEIE at 22.

Coordinating Work With Montana's Waiver and Medicaid

Working part-time doesn't jeopardize DDP eligibility or a position on the 0208 Comprehensive Waiver waiting list. DDP operational eligibility is determined by clinical criteria — IQ, adaptive functioning, and age of onset — not by income or employment status.

The Medicaid question requires more care. Montana is a Section 1634 state: SSI approval automatically triggers Medicaid enrollment. If earned income eventually reduces the SSI cash benefit to $0, Section 1619(b) protects Medicaid eligibility as long as the individual still meets the disability standard and needs Medicaid to work. Montana's 1619(b) annual income threshold is published each year by the SSA.

The Montana SSI at 18 & Adult Disability Benefits Guide includes a work-and-benefits coordination worksheet that maps how part-time employment interacts with SSI, SEIE, ABLE account deposits, and Medicaid across the full transition timeline.

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