Taxes

Is Someone You Know Wondering “Who” FICA Is?

August 22, 2016 • By

Last Updated: August 22, 2016

Businessman Filling ChequeSocial Security’s Acting Commissioner, Carolyn W. Colvin, likes to tell this amusing story. A colleague’s teenage daughter came home bursting with excitement after receiving her first paycheck. But she had one question about her earnings statement.

“Well, Dad” — she asked him earnestly — “who is this FICA?”

If you’re a seasoned worker, you probably know that this is a federal tax on wages. Two taxes, really. FICA stands for “Federal Insurance Contributions Act.” This is the law that funds both Social Security and Medicare through payroll taxes. Employees share this cost with their employer.

Your FICA contributions earn Social Security credits. For 2016, you need to make $1,260 in wages to earn one credit. You can earn up to four credits a year. Most of today’s workers need at least 40 credits to apply for retirement benefits. That’s ten years of work. Of course, you have to be old enough to retire too!

Social Security also pays benefits to workers who become severely disabled, and to survivors when a worker dies. The number of credits you need to qualify for these benefits depends on your age when you become disabled or die.

You can get Social Security retirement benefits as early as age 62. If you retire before your full retirement age, your benefit will be smaller. Your benefit will be highest if you put off retirement until you’re 70. We base your retirement benefit on your average earnings over your working years.

Visit our benefits planner to find out more.

Your FICA contributions also pay for Medicare hospital insurance. Medicare is the country’s health insurance program for people age 65 or older. People younger than 65 with certain disabilities or permanent kidney failure can also qualify for Medicare. You’ll find everything you want to know about Medicare at Medicare.gov.

If FICA were a person, she’d have plenty to juggle! Social Security covers an estimated 165 million workers. The program pays benefits to about 40 million retired workers, 9 million workers with disabilities, and 6 million survivors of workers who have died. It also helps about 5 million dependent family members.

The equivalent law for self-employed workers is the “Self-Employment Contributions Act,” or SECA. If you’re self-employed, you pay both worker and employer contributions toward Social Security and Medicare. The employer share counts as a deductible business expense.

We make it easy to get estimates of your future retirement, survivors, and disability benefits. By creating a my Social Security account, workers have 24-hour access to their personalized Social Security Statement. Besides showing your future benefits, the Statement lets you check to be sure the earnings information we have for you is correct.

Create your account to take advantage of this invaluable financial planning tool. It’s free, fast, and secure! If there’s someone in your life who may be wondering who FICA is, let them know too.


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J. Jioni Palmer, Associate Commissioner, External Affairs

J. Jioni Palmer, Associate Commissioner, External Affairs

Comments

  1. Michael

    I am 61 in May, I get 346. A month from ssi,can If I file now will they add that to my check?

    • Ray Fernandez, Public Affairs Specialist

      The earliest age at which you can begin receiving your Social Security retirement benefits is 62. You can apply for your benefits 3 months before you turn 62. Thanks!

  2. April D Rawls

    Trying to see how do you get a fic a form or statement

  3. Amy Valentine

    Well I am disappointed with fica and the way it works. When I started working in 1980 the minume wage was $1.25 an hour. I worked my whole life and supported my children and now that the economy crashed my social security check it enough to live on when the economy crashed I received unemployment for a while I tried to work where I could work but my statement from Social Security if I was to retire back in 2001 I would have received 1200 and some a month plus benefits for my kids but now the economy crash I get $863 a month that’s almost the same that’s what somebody that that lived on welfare their whole life makes from Social Security I truly believe I should be getting more money but I don’t have an attorney to go back and make sure I’m making the right amount so shameful that the United States don’t think more of me then they do I raise my children I worked I get everything all by myself I should get disability payments for raising my children without raising them on welfare

    • Vonda VanTil, Public Affairs Specialist

      Hi Amy. A Social Security retirement benefit is calculated by using your highest 35 years of earnings. If you do not have 35 years of earnings, we will use all of the earnings on your record and factor in an annual total of $0.00 earnings for each of the remaining years.

      All monthly Social Security and Supplemental Security Income (SSI) benefits for more than 67 million Americans will increase 2.8 percent in 2019. The 2.8 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 62 million Social Security beneficiaries in January 2019. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2018. (Note: some people receive both Social Security and SSI benefits.)

  4. Dean

    I am a federal retiree. After I retired under CSRS I worked as a contractor and paid into SS. When I fully retired I received SS, reduced substantially by law. In the 2019 2.8% cost of living increase there was no increase in my SS payments. They were $468/month in 2018 and remained $468/month in the SSA mailing for 2019. Did I get no cost of living increase? The 2.8% should have raised the monthly check to $481. Please explain. Thanks.

    • Ray Fernandez, Public Affairs Specialist

      Hello Dean. Unfortunately, and because of security reasons we do not have access to personal records in this blog and cannot answer your question at this time. One of our representatives should be able to provide you with an explanation. Please call our toll free number at 1-800-772-1213 for assistance. Representatives are available Monday through Friday, between 7 a.m. and 7 p.m. Generally, you will have a shorter wait time if you call later during the day or later in the week. Thanks!

  5. Olivia Belk

    Thank you for the information I have read was very important to me. Out of all the years I did not know what FICA meant. Understanding these acronyms is very important. Social Security does a lot. I’m glad I contribute to FICA. Helping others is good. This pleases God Almighty.

  6. Yolanda

    My husband and I worked from the age of 14. At 21 I found my job at a clinic and for 5 years I paid F.I.C.A. NOW I’m a widow and i get no spousal benefits…….neither does our ONLY CHILD!!! Also, shouldn’t those 5 years of FICA be taken into consideration? As it stands now, looks normal for a hardworking man who dies and they deny his family benefits. Then for me, I paid 5 yrs of FICA and it displays 00000 for five years. Just said it’s like I didn’t pay anything.

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