Social Security Tax Increase in 2013

[Snagus]

I wasn't aware of this increase from the PPACA health care reform act.
0.9% to 1.8% on "high" earnings. Couldn't find where it was discussed before.


From the SS Trustee Report:
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How Are Social Security and Medicare Financed? For OASDI and HI, the major source of financing is payroll taxes on earnings that are paid by employees and their employers. The self-employed are charged the equivalent of the combined employer and employee tax rates. During 2009, an estimated 156 million people had earnings covered by Social Security and paid payroll taxes; for Medicare the corresponding figure was 160 million. The payroll tax rates are set by law and for OASDI apply to earnings up to an annual maximum ($106,800 in 2010) that ordinarily increases with the growth in the nationwide average wage. When the cost-of-living adjustment (COLA) for December of any year is zero, which occurred in December 2009 and is projected for December 2010, the maximum taxable amount of earnings is not increased for the following year. This constraint will lower OASDI tax income in 2010 and 2011. In contrast, HI taxes are paid on total earnings. The payroll tax rates (in percent) for 2010 are:

OASI DI OASDI HI Total
Employees 5.30 0.90 6.20 1.45 7.65
Employers 5.30 0.90 6.20 1.45 7.65
Combined total 10.60 1.80 12.40 2.90 15.30

Starting in 2013, the ACA imposes an additional HI tax equal to 0.9 percent of earnings over $200,000 for individual tax return filers, and on earnings over $250,000 for joint return filers.


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[SirVLCIV]

Originally Posted by Snagus

I wasn't aware of this increase from the PPACA health care reform act.
0.9% to 1.8% on "high" earnings. Couldn't find where it was discussed before.


From the SS Trustee Report:
************************************************** ****
How Are Social Security and Medicare Financed? For OASDI and HI, the major source of financing is payroll taxes on earnings that are paid by employees and their employers. The self-employed are charged the equivalent of the combined employer and employee tax rates. During 2009, an estimated 156 million people had earnings covered by Social Security and paid payroll taxes; for Medicare the corresponding figure was 160 million. The payroll tax rates are set by law and for OASDI apply to earnings up to an annual maximum ($106,800 in 2010) that ordinarily increases with the growth in the nationwide average wage. When the cost-of-living adjustment (COLA) for December of any year is zero, which occurred in December 2009 and is projected for December 2010, the maximum taxable amount of earnings is not increased for the following year. This constraint will lower OASDI tax income in 2010 and 2011. In contrast, HI taxes are paid on total earnings. The payroll tax rates (in percent) for 2010 are:

OASI DI OASDI HI Total
Employees 5.30 0.90 6.20 1.45 7.65
Employers 5.30 0.90 6.20 1.45 7.65
Combined total 10.60 1.80 12.40 2.90 15.30

Starting in 2013, the ACA imposes an additional HI tax equal to 0.9 percent of earnings over $200,000 for individual tax return filers, and on earnings over $250,000 for joint return filers.


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"FICA-HI" is the Medicare tax. FICA-OASDI is Social Security. This Medicare tax increase sure is news to me, though.

[Snagus]

Originally Posted by SirVLCIV

"FICA-HI" is the Medicare tax. FICA-OASDI is Social Security. This Medicare tax increase sure is news to me, though.

I know Medicare and Social Security are separate but for this discussion I was just lumping them together.

[SamTheEagle]

Then why wouldn't you call it a Medicare Tax Increase? Calling it a Social Security tax increase is highly misleading.

[Snagus]

Originally Posted by SamTheEagle

Then why wouldn't you call it a Medicare Tax Increase? Calling it a Social Security tax increase is highly misleading.

ha ha. Yes they are not related at all.

[Arthur Kade]

Originally Posted by Snagus

I wasn't aware of this increase from the PPACA health care reform act.

Originally Posted by SirVLCIV

This Medicare tax increase sure is news to me, though.

srsly?