Were you at the max last year in terms of income subject to Social Security tax — $113,700? If so, don't gloat over the 3 percent raise you just got. It ain't tax-free money. The government just raised the max to $117,000.
This was among the changes announced by the Social Security Adminstration Oct. 30. Starting on Jan. 1, the SSA will raise the maximum amount subject to its employee payroll tax to $117,000. The adjustment is expected to affect as many as 10 million U.S. employees.
The Society for Human Resource Management offers guidance to absorb these changes. SHRM says that, what the changes mean for HR managers is, as of Jan. 1, they'll need to start collecting at the higher rate to meet the requirements of the Federal Insurance Contributions Act, or FICA.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
