Social Security

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Related to Social Security Tax: Medicare Tax, Federal income tax

Social Security

A program of the United States federal government that provides income to disabled and (especially) elderly people. That is, persons who have paid into the Social Security system for a certain period of time are eligible to receive what amounts to a government pension in retirement or in the event of disability. It is paid out of the Social Security trust fund and is financed through FICA taxes. Because Social Security is the single largest expense of the federal budget, periodic attempts are made to wholly or partly privatize Social Security, though opponents claim that doing so would make the American social safety net less secure. See also: SSI, TANF, SCHIP.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Social Security.

Social Security is a federal government program designed to provide income for qualifying retired people, their dependents, and disabled people who meet the Social Security test for disability.

You qualify for retirement benefits if you have had at least the minimum required payroll tax withheld from your wages for 40 quarters, the equivalent of 10 years.

The minimum for each quarter is set by Congress and increases slightly each year. You earn credits toward disability coverage in the same way.

The amount you receive in Social Security retirement benefits, up to the annual cap, is determined by the payroll taxes you paid during your working life, which were matched by an equal tax paid by your employers. Some of your benefit may be subject to income tax if your income plus half your benefit is higher than the ceiling Congress sets.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Holding: The court, in a June 2017 decision, held that Paychex was the statutory employer of the worksite employees and thus was entitled to a refund of the overpaid Social Security taxes.
For an individual living in a country with an SSTA, if the net investment income tax is a social security tax, it should be excluded from applicability because:
Social security tax cut will benefit larger part of the economy ...
This will result in such corporations having to pay no more in Social Security taxes than a single employer pays.
With the direct payments of the employer covering the entire tax, the demand curve for labor shifts down by the total tax per worker--the marginal value of workers is now worth less to the employer at every employment level by an amount equal to the Social Security tax paid for each worker.
White House memos indicate that the president wants to allow undefined "younger workers" to invest up to 4 percent of their income--two-thirds of the Social Security taxes withheld from their pay--into private investment accounts.
More than 70 years later, as Congress and the nation debate the future of Social Security--and in particular, whether to allow workers to direct a portion of their Social Security taxes into private investment accounts--the relevance of this history is becoming a matter of fierce dispute.
What people don't understand and the news media doesn't explain very often, said Shapiro, is that the Social Security tax is not as progressive as the income tax.
(23) Social security taxes will be assessed at the same time the employee is subject to income tax.
First, recapture taxes, penalties and other taxes (related to retirement plans, to the underpayment of estimated tax, to uncollected employee social security tax on tips and on group-term life insurance, and to excess "golden parachute payments"), and exempt organizations excise taxes are added; excess social security taxes and the earned income credit (EIC) that is used to offset nonincome taxes are subtracted.(6) Second, fiduciary income taxes are added, These taxes are included in the payments series because personal income includes fiduciary income.
Food or beverage establishments are provided with a business tax credit, equal to the amount of the employer's Social Security tax obligation (7.65 percent) attributable to reported tips in excess of those treated as wages for purposes of satisfying the minimum wage provisions of the Fair Labor Standards Act (FLSA).
Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $117,000 from $113,700.

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