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.
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