The Social Security Administration recently announced monthly social security and supplemental security income benefits (SSI) will not increase in 2016. This lack of increase is based upon the Consumer Price Index over the past 12 months ending in September 2015. A recap of the key amounts is outlined here:
2016 Key Social Security Benefits
What does it mean for you?
- Up to $118,500 in wages will be subject to Social Security Taxes (This is unchanged from 2015). This amounts to $7,347.00 in maximum annual employee Social Security payments. Any excess amounts paid due to having multiple employers can be returned to you via a credit on your tax return.
- For all retired workers receiving Social Security retirement benefits the estimated average monthly benefit will be $1,341/mo. in 2016.
- SSI (Supplemental Security Income) is the standard payment for people in need. To qualify for this payment you must have little income and few resources ($2,000 if single/$3,000 if married).
- A full-time student who is blind or disabled can still receive Supplemental Security Income (SSI) benefits as long as earned income does not exceed the monthly and annual student exclusion amounts listed above.
Social Security & Medicare Rates
After temporary payroll tax rate cuts that ended in 2012, the rates do not change from 2015 to 2016.
Note: The above tax rates are a combination of 6.20% Social Security and 1.45% for Medicare. There is also a Medicare .9% wages surtax for those with wages above $200,000 single ($250,000 joint filers) that is not reflected in these figures. Please recall that your employer also pays Social Security and Medicare taxes on your behalf. These figures are reflected in the self-employed tax rates, as self-employed individuals pay both halves of the tax.