Social Security Wage Base Increases for 2019

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The Social Security Administration (SSA) issued a Release that the maximum earnings subject to the Social Security component of the FICA tax will increase from $128,400 to $132,900 for 2019. This change means that for tax year 2019, the maximum Social Security tax that employers and employees will each pay is $8,239.80 ($132,900 x 6.2%). A self-employed person with at least $132,900 in net self-employment earnings will pay $16,479.60 ($132,900 x 12.4%) for the Social Security part of the self-employment tax.

Note that the Medicare component remains 1.45% of all earnings, and individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly, $125,000 for married filing separately) will pay an additional 0.9% in Medicare taxes, as required by the Affordable Care Act.

The solvency of both the social security and Medicare programs remain a matter of great concern to members of Congress and even more so for taxpayers and retirees. The size of the entitlement payments have swelled over time, and the annual increase in the maximum earnings subject the social security has become an almost routine adjustment.

Other 2019 cost-of-living adjustments announced by the Social Security Administration can be found at on the SSA website.

If you have any questions, please contact Bob Grossman or Don Johnston.