|
For 2006, the maximum limit on earnings for withholding
in the Old-Age, Survivors, and Disability (OASDI) portion of the Social
Security tax increases from $90,000 to $94,200. This is a $4,200 increase
from the 2005 limit. The Social Security tax rate remains at 6.2 percent,
resulting in a maximum Social Security tax of $5,840.40. This is a $260.40
increase from the 2005 limit of $5,580.00. There is still no limit on
the amount of earnings subject to the Medicare portion of the tax rate.
The Medicare tax rate applies to all taxable wages,
and remains at 1.45 percent. The Federal Insurance Contribution Act (FICA)
tax rate, which is the combined Social Security tax rate of 6.2 percent
and the Medicare tax rate of 1.45 percent, remains at 7.65 percent for
2006.
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The information in the following
table is effective January 1, 2006.
| Tax
Withholding |
2005
|
2006
|
| Social Security
Gross Limit |
$90,000.00
|
$94,200.00
|
| Social Security
Liability Limit |
$5,580.00
|
$5,840.40
|
| Medicare Gross Limit
|
No Limit
|
No Limit
|
| Medicare Liability
Limit |
No Limit
|
No Limit
|
— Payroll,
Finance, 10-27-05
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