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The Social Security tax is one component of the Federal Insurance Contributions Act tax (FICA) and Self-employment tax, the other component being the Medicare tax. It is also the maximum amount of covered wages that are taken into account when average earnings are calculated in order to determine a worker's Social Security benefit .
In some cases, some or all of your Social Security income can be state tax-free. For those who have to pay, monthly taxes on the average benefit will reach between $53.53 and $124.72. Kansas
Since 1990, the employee's share of the Social Security portion of the FICA tax has been 6.2% of gross compensation up to a limit that adjusts with inflation. [a] [9] The taxation limit in 2020 was $137,700 of gross compensation, resulting in a maximum Social Security tax for 2020 of $8,537.40. [7]
The Federal Insurance Contributions Act (FICA) (codified in the Internal Revenue Code) imposes a Social Security withholding tax equal to 6.20% of the gross wage amount, up to but not exceeding the Social Security Wage Base ($97,500 for 2007; $102,000 for 2008; and $106,800 for 2009, 2010, and 2011). The same 6.20% tax is imposed on employers.
Learn whether your state taxes Social Security benefits, including up-to-date details on changing rules, regulations and thresholds for the upcoming tax year. States that tax Social Security ...
Below you’ll find the tax rates for each state that taxes Social Security as well as any exemptions. ... Social Security benefits from their Colorado tax return. Those aged 55-64 can deduct up ...
These include Social Security and Medicare taxes imposed on both employers and employees, at a combined rate of 15.3% (13.3% for 2011 and 2012). Social Security tax applies only to the first $132,900 of wages in 2019. [8] There is an additional Medicare tax of 0.9% on wages above $200,000. Employers must withhold income taxes on wages.
For example, in Colorado, residents ages 65 and older have been able to fully deduct federally taxed Social Security benefits on their state income tax returns since tax year 2022. For 2025, that ...