The Social Security wage base will be going up in 2017 to $127,200, an $8,700 hike over this year’s cap. The Social Security tax rate on employers and employees will stay at 6.2%. Employers’ share of Medicare tax will remain 1.45% on all compensation. Ditto for employees, who will also pay the 0.9% Medicare surtax on wages that exceed $200,000 for singles and $250,000 for marrieds. This extra levy doesn’t hit employers. Self-employeds owe it on net earnings above the thresholds.
The nanny tax threshold won’t change. It will remain $2,000.
Social Security recipients will see a tiny 0.3% hike in their benefits in 2017. The earnings test limits will head up. People who turn 66 next year will not lose any benefits if they earn $44,880 or less before they reach that age. Individuals who are 62 through 65 by the end of 2017 can make up to $16,920 before they lose any benefits. There is no earnings cap once a beneficiary turns 66.
The amount needed to qualify for coverage will rise to $1,300 a quarter. So earning $5,200 anytime during 2017 will net the full four quarters of coverage. You need 40 quarters of coverage to qualify for Social Security retirement benefits.