calculators
forms and publications
news
about etf
frequently asked questions
contact etf
site map
video library
related links
home
top of page
home
members retirees employers governing boards careers at etf
 
Employers

Employer Bulletin

All WRS Employers
Vol. 20, No. 19
December 8, 2003

Social Security Wage Base Set to Increase for 2004

As the designated liaison between the Social Security Administration and employers with Social Security Section 218 Agreements, the Department of Employee Trust Funds produces this Employer Bulletin to provide updated information, including Social Security and Medicare wage bases for 2004. 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 2004

Effective for all wages paid on or after January 1, 2004, the Social Security (full FICA) wage base will increase from $87,000 to $87,900. The Medicare wage base will not have a dollar limit for 2004.

Although the wage base will increase, the employer and employee tax rates will remain the same in 2004. The Social Security (full FICA) rate remains at 7.65% (6.20% Social Security plus 1.45% Medicare) for wages up to $87,900. All wages over $87,900 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 2004

The maximum amount a Social Security beneficiary, between the ages of 62 through 64, may earn without any reduction in benefits will increase to $11,640 per year ($970 a month). An increased earnings limit will then apply beginning January 1 following the calendar year during which the individual turned 64 and will remain in effect through the end of the month in which the individual turns 65 years and 2 months. The maximum earnings, without any reduction, prior to turning 65 years and 2 months is $31,080 per year, or $2,590 a month. There is no limit on earnings beginning the month after the individual attains age 65 years and 2 months.

Example:

John Doe will turn 65 on June 10, 2004. Through December 31, 2003, Mr. Doe's earnings limit is $970 a month. For the months January 2004 through July 2004, John Doe's earnings limit is $2,590 each month. There is no earnings limit beginning August 2004.

2004 Earnings Requirement for One-Quarter Credit for Social Security

In 2004, the amount of earnings required for a Social Security credit (one quarter of coverage) will increase from $890 to $900 ($1,800 will earn two quarters, etc.).

2004 Benefit Increase for Social Security

The Social Security benefit increase for 2004 will be 2.1%.

Election Worker Exclusion for 2004

The earnings exclusion for election workers will remains the same at $1,200 for 2004.

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

 

supporting excellence in Wisconsin public service