I have opted out of Social security years ago after entering the ministry. I worked at numerous secular jobs prior to entering minstry and therefore have acrued benefits which I began receiving at age 62. However this past tax year, 2011, I was paid for continuing employment with the same church which I pastored for 27 years. I am now working part time and earned $10,500 over the limit of $14,600 in 2011. The Social Security Administration says that I owe them $5,000+ for the benefits I received from them because I earned over the limit of $14,680.
I called the Social Security office twice and both times was told the money earned should be exempt and all I needed to do is prove the income was paid by the church, and present this evidence to the local office. I went to the local office and they said it was not exempt. They said any income, regardless of where or how it was earned was not exempt from this $14,680 limit.
Can you tell me if it is exempt or not, and if it is what do I need to do next?