Social Security wage base increases to $142,800 for 2021

Social Security and Medicare payroll taxes are collected together as the Federal Insurance Contributions Act (FICA) tax. FICA tax rates are statutorily set and can only be changed through new tax law. The tax applies to the first $7,000 you pay to each employee as wages during the year. If you withheld more than the correct amount of social security tax or Medicare tax from wages paid, and discover the error before filing Form 941-SS, 944, or 943, repay or reimburse the employee the amount overwithheld before filing the return. Report current period adjustments for fractions of cents, third-party sick pay, tips, and group-term life insurance on Form 941-SS, lines 7–9; Form 943, line 10; or Form 944, line 6. Report the correction of underreported and overreported amounts for the same tax period on a single Form 941-X, Form 943-X, or Form 944-X unless you’re requesting a refund.

And the Trustee’s Report estimates that those facing the surcharges will have combined Medicare premiums and surcharges ranging from $202 to $490.50 per month. These special certifying requirements don’t apply to federal agencies who have employees working in the U.S. These special certifying requirements don’t apply to federal agencies who have employees working in Puerto Rico. If you made all FUTA tax deposits on time, you may file Form 940 by February 10, 2023. Exceptions to interest-free corrections of employment taxes. The term “legal holiday” means any legal holiday in the District of Columbia.

Social Security Wage Base Updates for 2023

Access to government websites and applications will now require the use of up-to-date and secure web browsers. You can get answers to many additional questions on the Funeral Assistance FAQ pages. As of July 1, 2023, there were more than 477,534 applications totaling more than $3.07 billion for 488,103 decedents. Applications can include the funeral expenses for more than one decedent in a state. You must provide FEMA a copy of an official death certificate that shows the death occurred in the United States, including U.S. territories and the District of Columbia, occurred after January 20, 2020, and was attributed to COVID-19. Depending on the data source, 12 and 28 percent of high-growth startups are run by women, although women make up 45 percent of the overall labor force.

• If you deposited more than the right amount of taxes for a tax period, you can choose on Form 941-SS, 941, 944, or 943 for that tax period to have the overpayment refunded or applied as a credit to your next return.
• Armed Forces who are stationed in the CNMI but have a state of legal residence outside the CNMI.
• The Social Security Administration (SSA) announced that the maximum amount of wages subject to the old age, survivors, and disability insurance (OASDI) tax will increase to $142,800 in 2021 from $137,700 in 2020.
• Please tell us if you require a reasonable accommodation to provide documents in an alternative format including braille, audio file (CD), data format (screen-reader accessible file on CD) and large print (18 point font) as requested, or TTY relay communications.
• For purposes of the $100,000 rule, don’t continue accumulating taxes after the end of a deposit period.

On January 25, 2023, the state of Illinois repaid all
outstanding Title XII advances. Because of this action, the state
should not be subject to a FUTA credit reduction for calendar year , as long as the state does not borrow again and have
outstanding advances as of November 10, 2023. The Social Security Administration recently announced that the maximum earnings subject to Social Security tax will increase from $137,700 in 2020 to $142,800 in 2021. There is no limit on earnings under this test for workers who have reach or passed their full retirement age for the entire year. The growth of the Social Security wage cap from $118,500 in 2016 to 142,800 in 2021 represents more than a 20 percent increase over the past five years. And if you’re nearing retirement, research Social Security claiming strategies carefully.

Benefits

Your employees report tips on Form 4070 or on a similar statement. They may also use Form 4070A to keep a record of their tips. This publication is for employers whose principal place of business is in the U.S.

A traveling or city salesperson (other than an agent or commission driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. The orders must be for merchandise for resale or supplies for use in the customer’s business. The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. Generally, employees are defined either under common law or under special statutes for certain situations. 15-A for details on statutory employees and nonemployees. Apply for an employer identification number (EIN) online.

Contractors: Tips for Managing Through a Downturn

For more information on Additional Medicare Tax, go to IRS.gov/ADMTfaqs. Go to IRS.gov/Forms to download current and prior-year forms, instructions, and publications. Electronic option for filing Forms W-2AS, W-2CM, W-2GU, or W-2VI. Employers in American Samoa, the CNMI, Guam, and the U.S. Virgin Islands can use the Social Security Administration’s (SSA’s) W-2 Online service to create, save, print, and submit up to 50 Forms W-2AS, W-2CM, W-2GU, or W-2VI at a time over the Internet.

• In Race and Gender in Entrepreneurial Finance (NBER Working Paper 30444), Michael Ewens surveys available data and presents a framework for assessing gender and race gaps in startup founding, financing, and growth.
• Go to IRS.gov/Payments for information on how to make a payment using any of the following options.
• A recent press release from the Social Security Administration on October 13, 2020, announced that the maximum amount of earnings subject to the Social Security tax would increase to $142,800 (amount in 2021) from $137,700 (2020’s amount).
• Using those findings, agencies developed Equity Action Plans for addressing—and achieving—equity in their mission delivery for all Americans.

If you don’t want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. See Payment With Return, earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941-SS or 944 taxes).

Qualified sick leave wages and qualified family leave wages for leave taken after March 31, 2021, and before October 1, 2021, are subject to both the employer share (6.2%) and employee share (6.2%) of social security tax (12.4% total).. You can choose to treat certain taxable noncash fringe benefits (including personal use of an automobile provided by you) as paid by the pay period, quarter, or on any other basis that you choose, but they must be treated as paid at least annually. You don’t have to make a formal choice of payment dates or notify the IRS. You may change methods as often as you like, as long as all benefits provided in a calendar year are treated as paid no later than December 31 of the calendar year. However, see Special accounting rule for fringe benefits provided during November and December, later. If you and your spouse jointly own and operate a business and share in the profits and losses, you may be partners in a partnership, whether or not you have a formal partnership agreement.

Lodging values for maritime employees apply only when the facilities meet specific minimum standards. Lodging value is $57.05 per week or $8.10 per day for periods of less than a week. Net trust fund Social Security Wage Base for 2020 Announced balances were substantially higher pre-COVID
than they were pre-Great Recession. Because of this, net trust fund
balances did not reach the negative levels experienced during the
Great Recession.

California Withholding Schedules

If you use the SSA’s Form W-2 Online service, Form W-3SS will be generated automatically based on your Forms W-2AS, W-2CM, W-2GU, or W-2VI. For more information, go to the SSA’s website at SSA.gov/bso. On October 10, 2019, the Social Security Administration (SSA) announced that the 2020 Social Security wage base will be $137,700, which is an increase of $4,800 from $132,900 in 2019. Women delegates from various countries played a key role in getting women’s rights included in the Declaration. Hansa Mehta of India (standing above Eleanor Roosevelt) is widely credited with changing the phrase “All men are born free and equal” to “All human beings are born free and equal” in Article 1 of the Universal Declaration of Human Rights.