Boeing has placed an improved contract offer before its largest white collar union, setting up a consequential vote for roughly 17,000 engineers and technical workers. The proposal includes a 32% raise, but another rejection could clear the way for a walkout.
If members turn down the offer for a second time, they could strike as soon as Oct. 7, one day after their current contracts expire. Boeing workers also went on strike in 2025 during a standoff that continued for several months.
For workers who started collecting Social Security before reaching full retirement age, a strike can create an unusual financial result. Ordinary union strike benefits are taxable income under IRS rules, yet they generally count as $0 in wages under the Social Security earnings test.
Consider a hypothetical Boeing engineer, age 64, who claimed Social Security early and continued working. Every regular paycheck counts toward the retirement earnings test, which can reduce benefits for recipients below full retirement age who earn more than the annual limit.
A strike stops those regular paychecks and replaces some income with union strike benefits. Social Security generally does not classify ordinary strike benefits as wages, regardless of whether the worker walks a picket line or remains available to the union.
The IRS takes a different approach. IRS Publication 525 treats strike and lockout benefits as taxable income, meaning the payments can increase a worker’s adjusted gross income even when Social Security excludes them from countable wages.
There is an important exception involving separate payments for picket or strike duties. If a union pays a worker specifically for those services, the money counts as wages once the payments reach at least $100 during the calendar year.
The hypothetical engineer shows how sharply those classifications can change the outcome. Suppose he earned $20,000 in wages before the walkout and later received $15,000 in ordinary union strike benefits, giving him $35,000 in total cash.
For the Social Security earnings test, his countable wages would generally remain $20,000. The $15,000 strike benefit would still be taxable income, but it would not ordinarily increase the wage figure used for the annual earnings test.
In 2026, the annual earnings limit for someone below full retirement age for the entire year is $24,480. Social Security withholds $1 in benefits for every $2 of earnings above that limit, so the engineer’s $20,000 wage total would trigger no withholding.
The result changes if the $15,000 came from regular salary rather than ordinary strike benefits. His countable earnings would become $35,000, placing him $10,520 above the limit and potentially causing Social Security to withhold $5,260 in benefits.
Benefits withheld through the earnings test are not permanently lost. After the recipient reaches full retirement age, Social Security recalculates the benefit to provide credit for the months in which payments were withheld.
Taxable strike benefits can still create another cost because they raise adjusted gross income. For single filers, up to 50% of Social Security benefits can become taxable when combined income exceeds $25,000, while the threshold for married couples filing jointly is $32,000.
For single filers with combined income above $34,000, up to 85% of Social Security benefits can become taxable. The second threshold for married couples filing jointly is $44,000, making the tax effect of strike benefits an important part of the calculation.
Workers considering a walkout should identify whether each union payment is an ordinary strike benefit or separate compensation for services. They should also total wages earned since January, ask about picket payments, review the union’s tax reporting, and estimate whether combined income will cross the applicable tax thresholds.
A strike does not automatically create a Social Security advantage. The ultimate result depends on salary earned before the walkout, the amount received from the union, and whether each payment qualifies as an ordinary strike benefit or as wages for specific duties.