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Employers

Employer Bulletin

All WRS Employers
Vol. 19, No. 24
December 17, 2002

Social Security Wage Base Set to Increase for 2003

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 2003. 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 2003
    Effective for all wages paid on or after January 1, 2003, the Social Security (full FICA) wage base will increase from $84,900 to $87,000. The Medicare wage base will not have a dollar limit for 2003.

    Although the wage base will increase, the employer and employee tax rates will remain the same in 2003. The Social Security (full FICA) rate remains at 7.65% (6.20% Social Security plus 1.45% Medicare) for wages up to $87,000. All wages over $87,000 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 2003
    The maximum amount a Social Security beneficiary, between the ages of 62 through 64, may earn without any reduction in benefits will increase to $11,520 per year ($960 a month). For individuals turning 65 years and 2 months, the earnings limit applies to the months in that calendar year prior to turning age 65 years and 2 months. The maximum earnings without any reduction for the individual turning 65 years and 2 months are $30,720 per year or $2,560 a month for the calendar year months prior to age 65 years and 2 months. There is no limit on earnings beginning the month an individual attains age 65 years and 2 months.

    Example:

    John Doe will turn 65 on June 10, 2003. Until January 2003, Mr. Doe's earnings limit is $960 a month. For the months January 2003 through July 2003, John Doe's earnings limit is $2,560 each month. There is no earnings limit after July 2003.

  • 2003 Earnings Requirement for One-Quarter Credit for Social Security
    In 2003, the amount of earnings required for a Social Security credit (one quarter of coverage) will increase from $870 to $890 ($1,780 will earn two quarters, etc.).
  • 2003 Benefit Increase for Social Security
    The Social Security benefit increase for 2003 will be 1.4%.
  • Election Worker Exclusion for 2003
    The earnings exclusion for election workers will remains the same at $1,200 for 2003.

For more information, contact Dale Ferron, Department of Employee Trust Funds, at (608) 266-0728.

 

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