Recently, the Social Security Administration (SSA) published their annual release detailing changes to the Social Security wage base and the cost-of-living adjustment (COLA) for Social Security and Supplemental Security Income (SSI) benefits. Click here to read the SSA release in full.
In a helpful article published by the Journal of Accountancy, Martha Waggoner details the key details of the SSA release:
2023 Wage Base – For 2023, individual taxable earnings of up to $160,2000 will be subject to the Social Security tax (an increase of $13,200 from 2022).
Key Tax Rates –
- The old age, survivors, and disability insurance (OASDI) tax rate is 6.2% for both employees and employers (12.4% for self-employed individuals)
- The Medicare hospital insurance tax rate, which has no wage limit, remains at 1.45% for both employees and employers (2.9% for self-employed individuals)
- Taxpayers with earned income greater than $200,000 for individuals/$250,000 for married filing jointly/$125,000 for married filing separately are responsible for an additional hospital insurance tax of 0.9%.
2023 COLA Adjustment – Recipients of both Social Security and SSI benefits will see an increase of 8.7% starting in January 2023 (as compared to a 5.9% increase in 2022 and a 1.3% increase in 2021).
For further details regarding the SSA release, click here to read the article in full.