# Geothermal Lease Shifts Social Security Tax Rules

> Timberland geothermal leases can boost Social Security taxes without counting as earnings.
- Title: Geothermal Lease Shifts Social Security Tax Rules | Shortify
- Summary: Timberland geothermal leases can boost Social Security taxes without counting as earnings. Geothermal royalties on timberland may count as $0 toward Social…
- Keywords: social security, geothermal, timberland, mineral royalties, earnings test, taxable income, weyerhaeuser, hexagon energy, schedule e, schedule c, Lease, Shifts
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/social-security/2026/10/21/145000-acres-of-timberland-just-became-a-geothermal-play-mineral-royalties-can-tax-more-social-security-without-counting-as-earnings
- Author: Gerelyn Terzo
- Published: 2026-10-22T01:00:37+00:00
- Read time: 1 min
- Topics: social security, geothermal, timberland, mineral royalties, earnings test, taxable income, weyerhaeuser, hexagon energy, schedule e, schedule c
## Geothermal Lease on Timberland
Weyerhaeuser leased 145,000 acres of Washington and Oregon timberland to Hexagon Energy for geothermal rights.
## Social Security Earnings Test
Before full retirement age, Social Security counts earnings toward the earnings test with a $24,480 limit for 2026.
## Geothermal Royalties Count as $0
Passive geothermal royalties reported on Schedule E count as $0 toward earnings test despite $30,000 royalty checks.
## Taxable Income Increases
The $30,000 royalty raises combined income from $25,000 to $55,000, making 75% of Social Security benefits taxable.
## Tax Impact Calculation
An additional $6,282 in federal tax results from the royalty versus $3,600 on the royalty alone at 12% marginal rate.
## Active vs Passive Income
If the owner runs extraction operations, income moves to Schedule C and counts toward earnings test.
## Key Questions Before Signing
Check payment types, ownership role, current earnings, and combined income to avoid tax surprises.
## Key takeaway

Geothermal royalties on timberland may count as $0 toward Social Security earnings test but increase taxable benefits by up to 75%.