Social Security Wage Base and Other Related Items for 2016

The Social Security Administration announced in an October 15, 2015 news release that the maximum amount of earnings subject to Social Security tax in 2016 will remain unchanged at $118,500 that applied for wages paid in 2015.

The retirement earnings test exemption amounts will also remain unchanged for 2016.  For a worker under full retirement age the dollar amount of earnings at which benefits will be reduced is $15,720 ($1,310 /month) except for the year in which the worker obtains full retirement age for which the reduction will begin at annual earnings of $41,880 ($3,490/month).

One number that will change is the amount of earnings that will count toward one quarter of coverage.  That number will rise from $1,220 to $1,260 in 2016.  A worker may earn a maximum of four “quarters” of coverage in a single year.