Vol. 17, No. 24
November 20, 2000
Social Security Wage Base Set to Increase for 2001
As the designated liaison between the Social Security Administration
and employers with Social Security Section 218 Agreements, the Department
of Employee Trust Funds (ETF) produces this Employer Bulletin
to provide updated information including Social Security and Medicare
wage bases for 2001. The following applies to all Wisconsin Retirement
System employers and all other public employers subject to a Social
Security Section 218 agreement.
Social Security and Medicare Wage Bases and Rates for
Effective for all wages paid on or after January 1, 2001, the
Social Security (full FICA) wage base will increase from $76,200
to $80,400. The Medicare wage base will not have a dollar limit
Although the wage base will increase, the employer and employee
tax rates will remain the same in 2001. The Social Security
(full FICA) rate remains at 7.65% (6.20% Social Security plus
1.45% Medicare) for wages up to $80,400. All wages over $80,400
are subject only to the 1.45% Medicare rate. The rate remains
at 1.45% for others who are subject only to Medicare.
Earnings Exemptions for 2001
The maximum amount a Social Security beneficiary, between the
ages of 62 through 64, may earn without any reduction in benefits
will increase to $10,680 per year ($890 a month). The Senior
Citizens' Freedom To Work Act of 2000 requires individuals
to test the earnings limit for the calendar year in which they
attain the age of 65. The maximum earnings without any reduction
for the individual turning 65 is $25,000 per year ($2,084 a
month) for the calendar year months prior to age 65. There is
no limit on earnings beginning the month an individual attains
Example: John Doe will turn 65 on June 10, 2001. Until January
2001, Mr. Doe's earnings limit is $890 a month. For the
months January 2001 through May 2001, John Doe's earnings
limit is $2,084 each month. There is no earnings limit after
2001 Earnings Requirement for One-Quarter Credit for
In 2001, the amount of earnings required for a Social Security
credit (one quarter of coverage) will increase from $780 to
$830 ($1,660 will earn two quarters, etc.).
2001 Benefit Increase for Social Security
The Social Security benefit increase for 2001 will be 3.5%.
Election Worker Exclusion for 2001
The exclusion will remain at $1,100 for 2001.
For more information, contact Dale Ferron, Department of Employee
Trust Funds, at (608) 266-0728.