Does FICA tax affect Social Security benefits? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Does FICA tax affect Social Security benefits?

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in Small Business Tax

Q. I’m collecting Social Security retirement income. Will FICA tax paid on some W-2 income I received in 2010 increase my retirement income benefit? B.B., via e-mail

A. No. Social Security retirement benefits are based on your earnings during your working career. The benefits do not reflect amounts paid as FICA. But note that earnings received while you’re collecting retirement benefits may actually reduce the benefits you receive if you exceed the so-called “earnings limit.” For 2011, the limit is generally $14,160 (the same as in 2010).

Tip: For detailed information about retirement benefits for Social Security recipients, visit

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