Vol. 18, No. 22
December 14, 2001
Social Security Wage Base Set to Increase for 2002
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 2002. 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, 2002, the
Social Security (full FICA) wage base will increase from $80,400
to $84,900. 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 2002. The Social Security
(full FICA) rate remains at 7.65% (6.20% Social Security plus
1.45% Medicare) for wages up to $84,900. All wages over $84,900
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 2002
The maximum amount a Social Security beneficiary, between the
ages of 62 through 64, may earn without any reduction in benefits
will increase to $11,280 per year ($940 a month). For individuals
turning 65, the earnings limit applies to the months in that
calendar year prior to turning age 65. The maximum earnings
without any reduction for the individual turning 65 is $30,000
per year or $2,500 a month for the calendar year months prior
to age 65. There is no limit on earnings beginning the month
an individual attains age 65.
John Doe will turn 65 on June 10, 2002. Until January 2002,
Mr. Doe's earnings limit is $940 a month. For the months
January 2002 through May 2002, John Doe's earnings limit
is $2,500 each month. There is no earnings limit after May 2002.
2002 Earnings Requirement for One-Quarter Credit for
In 2002, the amount of earnings required for a Social Security
credit (one quarter of coverage) will increase from $830 to
$870 ($1,740 will earn two quarters, etc.).
2002 Benefit Increase for Social Security
The Social Security benefit increase for 2002 will be 2.6%.
Election Worker Exclusion for 2002
The earnings exclusion for election workers will increase to
$1,200 for 2002.
For more information, contact Dale Ferron, Department of Employee
Trust Funds, at (608) 266-0728.