FICA wage base increases to $110,100 for 2012

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in Compensation and Benefits,Human Resources,Small Business Tax

The Social Security Administration has announced that the taxable wage base for the Social Security portion of FICA will increase to $110,100 in 2012. That’s a 3.1% hike over the 2011 wage base of $106,800.

Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.

Except for pretax medical and tax-free fringe benefits, all wages are subject to the 1.45% Medicare portion of FICA, since no wage base applies to Medicare. (SSA Fact Sheet, 10-19-11

2012 Social Security tax rates up in the air

The one-year decrease in the employee Social Security tax rate—to 4.2%, from 6.2%—is scheduled to expire at the end of this year.

However, President Obama’s proposed American Jobs Act of 2011 would lower the employee Social Security tax rate further, to 3.1%, for 2012.

The Senate recently voted down the legislation, so it’s not...(register to read more)

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