The year 2020 will bring important changes to the Social Security program, including a 1.6 percent Social Security benefit increase and an increased annual earnings cap for the Old Age, Survivors and Disability Insurance (OASDI) tax, which is a component of the Federal Insurance Contributions Act (FICA) tax. Beginning in 2020, the maximum annual amount of earnings subject to the OASDI will increase to $137,700 from the current limit of $132,900 applicable in 2019.
Also beginning in 2020, the maximum retirement earnings test exempt amounts will be $18,240 annually (or approximately $1,520 monthly) for individuals under full retirement age. That means that for every two dollars earned in excess of that limit, one dollar in Social Security benefits will be withheld.
In addition, starting in 2020, the SSI federal payment standard will increase to $783 monthly for an individual and to $1,175 per couple. Here is a helpful fact sheet summarizing these and other important 2020 Social Security numbers.
Questions? Let Jane know.
Jane Fearn-Zimmer is a shareholder in the Elder and Disability Law, Taxation, and Trusts and Estates Groups. She dedicates her practice to serving clients in the areas of elder and disability law, special needs planning, asset protection, tax and estate planning and estate administration. She also serves as Chair of the Elder & Disability Law section of the NJSBA.