October 13, 2020 Social Security wage base to increase in 2021 The Social Security wage base will increase from $137,700 to $142,800 in 2021, higher than the $141,900 high-cost and $142,200 low-cost estimate published in the April 2020 Annual Report of the Board of Trustees. (See EY Tax Alert 2020-1087, 4-23-2030; Social Security Administration Press Release.) The Medicare tax rate for 2020 remains at 1.45% of all covered earnings for employers and employees. The Additional Medicare Tax of 0.9% applies to earned income of more than $200,000 ($250,000 for married couples filing joint). While employers are required to withhold the additional 0.9% on covered wages over $200,000, there is no employer matching contribution. For a quick reference chart see the following page. For the complete Social Security Administration fact sheet go here. ———————————————
——————————————— EY Payroll News Flash
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