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FICA Rates and Limits

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Question
What is FICA?

Answer

The Federal Insurance Contributions Act (FICA) refers specifically to the Social Security (OASDI) and Medicare Federal taxes. Both the employer and the employee contribute to FICA Each of these taxes is reported separately. For more information, see the instructions for Form 941.

What is the 2015 rate and wage bases?

For 2015, the social security tax rate is 6.2% each for the employer and employee (12.4% total). The social security wage base limit is $118,500.

The tax rate for Medicare is 1.45% each for the employee and employer (2.9% total). There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax.

When do I have to withhold additional Medicare?

In addition to withholding Medicare tax at 1.45%, you must withhold a 0.9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Additional Medicare Tax is only imposed on the employee. There is no employer share of Additional Medicare Tax.

When do I pay and report FICA?

FICA is paid with the Federal Taxes on a semi-weekly schedule, typically. It is reported quarterly on Form 941, 944, 943 or 945 depending on the type of business.

What about rates and wage bases for prior years?

  Social Security Medicare
Year Rate Wage Base Rate Wage Base
2014 6.2% $117,000 1.45% + 0.09% Unlimited
2013 6.2% $113,700 1.45% + 0.09% Unlimited
2012 6.2% employer 4.2% employee $110,100 1.45% Unlimited
2011 6.2% employer 4.2% employee $106,800 1.45% Unlimited

 

IRS FICA Guide


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Views: 1292 Created on: Apr 23, 2015
Date updated: Sep 24, 2015
Posted in: Resource

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