Independent New Hampshire Journalism · Northfield, NH

Working Under the Table Comes With a Clock. It Runs Out in Three Years.

Cash work does not defer the bill. It deletes your Social Security record, and federal law gives you three years, three months and 15 days to undo it.

Forty credits. That is the entire price of admission to Social Security, and nobody gets to pay at the door on the way out. In 2026 one credit costs $1,890 in reported earnings, four to a year, which means ten working years at minimum. The agency’s own benefits planner says it without a cushion: “We cannot pay benefits to you if you don’t have enough credits.”

Every cash job you took and never reported bought you zero of them. Not fewer. Zero. Twenty years of framing houses in Belknap County for folded twenties leaves the same mark on your earnings record as twenty years spent in a recliner.

Here is the part almost nobody working off the books in New Hampshire knows. There is a deadline on fixing it. Federal law gives you three years, three months and 15 days after the year the money was earned. After that the record hardens, and paying the tax late does not soften it back.

So this is not a lecture about the IRS getting its cut. New Hampshire does not tax wages at all. The people who lose the most from years of cash work are the people taking the cash, and the loss lands decades later, in a Social Security office, on a day when there is nothing left to do about it.

The forty-credit wall

Social Security credits are the unit that decides whether you are in the system or outside it. You get one for every $1,890 of covered wages or net self-employment income in 2026, capped at four a year no matter how much you make. Forty credits opens retirement benefits. Fewer than forty opens nothing.

Credits do not set the size of your check. The average of your earnings across your working life does that, so a career of unreported years hurts twice: it can lock you out entirely, and if you scrape past the wall it drags the average down with every empty year on the ledger.

The math is not demanding. Four credits in 2026 takes $7,560 of reported earnings. A part-time winter plow route, reported, clears it. The obstacle has never been the dollar figure. It is that nothing gets reported.

Three years, three months, fifteen days

This is the rule that turns a bad habit into a permanent one, and it is the reason a piece like this exists.

Read the exceptions closely, because they split the working world in two.

If you were an employee and your boss never filed a report of your wages, SSA can still add those wages after the deadline. That path stays open. What it demands is proof, and proof is the thing cash work is designed not to leave behind. Form SSA-7008, the request to correct an earnings record, asks for a W-2 or corrected W-2 and tells you to explain in writing why you cannot produce one.

If you were self-employed, subcontracting, or simply calling yourself a guy with a truck, the door is different. SSA can add self-employment income after the time limit only if you filed a self-employment tax return for that year before the limit ran out. No timely return, no entry. The SSA-7008 asks it flatly at question nine: did you file an income tax return reporting your self-employment income.

Writing the check to the IRS in 2035 does not put 2019 back on your record. The clock closed in April 2023.

People hear that you can always file late and assume the whole thing is recoverable. Late filing is worth doing for a stack of reasons below. Rebuilding a self-employment earnings record after the window shuts is not one of them.

Disability is the part nobody plans for

Retirement feels far away at 38. Disability does not schedule itself around that.

Social Security Disability Insurance runs on two tests, and the one that catches off-books workers is the recent-work test. If you are 31 or older when a disability begins, you generally need 20 credits earned in the ten years right before it started. That is five reported years out of the last ten. SSA warns directly that a worker who qualifies today and then stops paying in may not still qualify later.

Ten years of cash work does that. A framer who has been paid in envelopes since 2016 and blows out a disc next spring has the injury and none of the insurance he spent a decade not buying. The condition is real, the medical file is real, and the claim fails on a work-credit screen before any doctor is consulted.

For reference, SSA treats average earnings above $1,690 a month in 2026 as substantial gainful activity, $2,830 for workers who are blind. That is the ceiling on what a disabled claimant can earn. It is also a reminder of how thin the replacement income is, for the people who qualify at all.

The Medicare bill waiting at 65

Roughly 99 percent of Medicare beneficiaries pay nothing for Part A, according to the Centers for Medicare and Medicaid Services, because they have 40 quarters of Medicare-covered work behind them. Everyone else buys in.

In 2026 that buy-in runs $311 a month for people with 30 to 39 quarters, and $565 a month for people under 30 quarters. Call it $6,780 a year for hospital coverage that your neighbor who worked on the books gets for free, arriving at exactly the age when income stops.

New Hampshire’s side of the ledger

The Granite State makes the trap easier to walk into. The Department of Revenue Administration states plainly that New Hampshire “does not have an income tax on an individual’s reported W-2 wages,” and the Interest and Dividends Tax was repealed for tax periods beginning after December 31, 2024. No state withholding, no state return, nothing in April. It is easy to conclude that unreported cash costs the state nothing and therefore costs you nothing.

Both halves of that are wrong.

Federal self-employment tax is 15.3 percent on net earnings, 12.4 for Social Security and 2.9 for Medicare, owed once net earnings from self-employment hit $400. New Hampshire’s business taxes reach further down than most people assume: for tax periods beginning on or after January 1, 2025, any business organization with more than $109,000 in gross business income has to file a Business Profits Tax return at 7.5 percent, and the Business Enterprise Tax kicks in at $298,000 in gross receipts. A busy one-truck contractor can clear the BPT threshold without ever thinking of himself as a business.

Then there is coverage. RSA 281-A:5 requires every New Hampshire employer with any employee, full-time or part-time, to carry workers’ compensation insurance, and the state Department of Labor assesses civil penalties for going without. Being paid in cash does not repeal that statute. It does not strip a worker of the right to file a comp claim or a wage claim either. What it strips is evidence. A worker with no pay stubs, no W-2 and no reported hours is not without rights; he is without the paper that makes rights enforceable, and he is arguing with an employer who has every reason to say he was never there.

Unemployment works the same way. New Hampshire Employment Security requires at least $2,800 in base-period earnings, with at least $1,400 in each of two separate quarters, to establish monetary eligibility. Earnings the state never saw do not count toward either number. Layoffs, shutdowns and slow winters arrive anyway.

The federal clock that never starts

People working off the books often comfort themselves with a statute of limitations. There is not one.

Every unfiled year stays open forever. The IRS failure-to-file penalty runs 5 percent of the tax due per month up to 25 percent, with a minimum penalty of $525 for returns due after December 31, 2025 that land more than 60 days late. Failure to pay adds another half percent a month, also capped at 25 percent. Interest compounds on top.

The mirror image cuts the other way and gets less attention. Refunds expire. A taxpayer generally has three years to file and claim a refund, and the IRS is explicit that after that the money becomes property of the U.S. Treasury. For a cash-paid parent with two kids, that forfeited money frequently includes the Earned Income Tax Credit, which is worth thousands of dollars a year to exactly the households most likely to be paid off the books.

Put the two together and the arithmetic is ugly. Liability never expires. Refunds do.

What it takes to climb back

None of this is legal or tax advice, and anyone with real exposure should sit down with a tax professional or a low-income taxpayer clinic before filing anything. The sequence, though, is not complicated.

Pull your earnings record first. A my Social Security account shows what SSA has posted year by year, and Form SSA-7008 is how you contest it. Look at the recent years before the old ones, because those are the ones still inside the correction window and still worth fighting for.

Then file the back returns. Filing starts the assessment clock that has been running open-ended, it stops the failure-to-file penalty from growing, it makes payment plans available, and for self-employment years still inside three years, three months and 15 days it puts credits on your record that would otherwise disappear. Filing late is not the same as being caught. It is the only way to close years that are currently open forever.

And where the job is employment in fact, get on a W-2. Test it against the terms an independent contractor is supposed to meet under RSA 281-A:2, VI: a federal employer identification number, control over how the work is done and control over when it is done. A man who shows up at seven because someone told him seven, uses that person’s tools and takes that person’s direction is an employee wearing a contractor label.

Who the arrangement is really for

Nobody pays cash to be generous.

An employer who pays off the books skips the employer half of Social Security and Medicare, skips unemployment tax, skips the workers’ compensation premium that RSA 281-A:5 requires, and skips the payroll records that would make any of it auditable. Those obligations do not vanish. They land on the worker, who now carries the full 15.3 percent himself, carries his own injury risk, carries his own unemployment risk and carries an earnings record that quietly empties out year after year.

That is the deal. It is presented as a favor, tax-free money, no paperwork, everybody wins. What it does is transfer an employer’s entire cost of doing business onto a worker who will not see the bill for thirty years and will have no way to dispute it when it comes.

New Hampshire has a cash economy in framing, roofing, landscaping, plowing, cleaning, restaurant kitchens and home care, and it runs on people who are told this is normal. It is normal. It is also the reason a 66-year-old walks into the Social Security office in Concord with thirty years of hard work behind him and 14 credits on his record.

The window on the most recent three years is still open. That is the only good news in this piece, and it closes a little more every April.

— Dexter Dow, Granite State Report

Fact check

Editor’s note: Figures in this article are drawn from the Social Security Administration’s benefits planner and program handbook, Form SSA-7008, the Centers for Medicare & Medicaid Services 2026 premium fact sheet, Internal Revenue Service penalty and self-employment tax guidance, 26 U.S.C. § 6501, and the New Hampshire Department of Revenue Administration. Statements sourced to the New Hampshire Department of Labor and New Hampshire Employment Security are cited by agency name in plain text and are marked ATTRIBUTED in the fact-check table. Dollar thresholds for Social Security credits, Medicare premiums, substantial gainful activity and state filing requirements are adjusted periodically and should be confirmed against the agency for the year in question. Nothing here is legal or tax advice. Corrections are published in full and dated. Write to granitestatereport@gmail.com.