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Social Security Wage Base Increases for 2013

The Social Security Administration (SSA) has announced that the maximum amount of earnings subject to Social Security will be $113,700 for 2013, up from $110,100 for 2012. SSA also reported that the so-called “nanny tax” threshold remains at $1,800 for 2013.

On October 19, Rep. Steny Hoyer, D-Md., House Minority Whip, urged Congress to consider renewing the 2012 payroll tax holiday, which is scheduled to expire after December 31, 2012. The payroll tax holiday reduced the employee-share of OASDI taxes from 6.2 percent to 4.2 percent up to the Social Security wage base of $110,100 (with a comparable benefit for self-employed individuals) for calendar year 2012.

Wage base. Social Security limits the amount of earnings subject to taxation for a given year. This limit changes in connection with the national average wage index. For earnings in 2013, the Social Security wage base is $113,700.

SSA also announced that monthly Social Security benefits will increase 1.7 percent in 2013. The 1.7-percent increase is lower than the 3.6-percent increase for 2012.

Nanny tax. For 2013, the domestic employee coverage threshold is $1,800. This reflects no change from 2012. Earnings below the domestic employee coverage threshold are not taxable under Social Security.

References: SSA News Release and Fact Sheet

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