Taxes

Is Someone You Know Wondering “Who” FICA Is?

August 22, 2016 • By

Last Updated: August 4, 2021

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 personal 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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About the Author

J. Jioni Palmer, Associate Commissioner, External Affairs

Comments

  1. Martha S.

    LOL that is so funny we should scream!
    Most deductions on paychecks are part of a Monstrous Ponzi Scheme by the government for 40 years or more!

  2. Vince

    Why am I paying FICA and Medicare since I’m already drawing and on both and still working at 70….?

    • Ray F.

      Hi Vince. As long as you continue to work, even if you are receiving benefits, you will continue to pay Social Security taxes on your earnings. However, we will check your record every year to see whether the additional earnings you had will increase your monthly benefit. If there is an increase, we will send you a letter telling you of your new benefit amount. Thanks!

  3. Marjorie J.

    I do not understand this at all. I am a widow.

  4. Marjorie J.

  5. Steve

    The ignorance of the American populace is astounding regarding FICA & SECA.

  6. Daniel C.

    It’s my opinion that once someone starts drawing SS or SSDI, they should be exempt from paying Federal Taxes. Let them find the $$ elsewhere. We need every bit of our checks!

    • Jessie

      Depending on whether or not you have additional income, say from investments you created before you became disabled that you’re now drawing on, if your SSDI or SS is your ONLY income, you generally DON’T have to pay income taxes on it. I’ll put myself as an example and say that my income from my SSDI is WAY below the minimum for filling as a single individual with no dependents to declare and no other income assets. I’m also receiving Medicaid and Food Stamps because without them I wouldn’t survive.

      • Ray F.

        Hi Jessie. You must pay taxes on your benefits if you file a federal tax return as an “individual” and your “combined income” exceeds $25,000. If you file a joint return, you must pay taxes if you and your spouse have “combined income” of more than $32,000. If you are married and file a separate return, you probably will have to pay taxes on your benefits. See our Benefits Planner: Income Taxes and Your Social Security Benefits for more information.

  7. Alice M.

    Well gee. I am 88 years old. Did not pay into FICA until I was 52 years old. From then on until I retired in June, 2015, every dollar I earned as an employee had
    about 8 cents taken out for SS and Medicare. My boss paid the same FOR ME. When I had a business the last 24 years, I, myself, paid about 16 cents on every dollar of profit. Maybe I don’t get a HUGE SS benefit but it keeps me alive. Medicare paid for more than $200,000 in benefits for me in 2014. Thanks for SS and Medicare!! And by the way, since I am single, no death benefit—I have already paid for it myself.!!!!!

  8. Susan

    Carter you have proven your point by incorrect use of words such as “your” when you meant “you’re” and “response” when you meant “respond”. Apparently you don’t know how to use your keyboard either as you used a semi-colon instead of an apostrophe. So you are just as dumb as those you are “ragging on”.

    • Jessie

      No question is dumb unless it’s not asked. If someone is just not using punctuation right, that’s just ignorance of grammar that can be corrected. There’s no need to be rude. She’s simply asking a question.

  9. mathew p.

    how long have the ragheads and wetbacks worked for the bennys you rob from us and give to them along with free doctor care you are a bunch of dick heads

    • Carter

      That don’t even make sense and really you have no clue what your ragging on. Also please don;t response you may appear more than just dumb!

  10. Lucy M.

    Please let me know why I pay double Medicare taxation. The amount debited from my Social Security retirement check (I am 69 years old) and the 1.45% deducted from my paychecks (I am still working thanks God). I don’t receive double Medicare benefits. I understand the Social Security deduction because it increases my benefits, but I am flabbergasted with the double Medicare taxation.

    • DrGonzo888

      You pay a mandatory federal TAX to the IRS towards Medicare AND Social Security when working. Nothing is as certain as death and taxes!!
      PS: those FICA wages MAY raise your SS benefit

    • Susan

      I don’t understand where you get double taxation for Medicare? Some who have higher income pay more for Medicare. It depends on your income declared on your taxes. If you are still working, you are still going to have FICA withdrawn from your paycheck no matter what age you are.

    • Jessie

      Lucy, the amount deducted from your retirement check is a Premium Fee for receiving Medicare, it’s NOT a TAX. You’re being charged it because your income is high enough that you don’t qualify to have your state of residence post it for you. Some people, such as those that are disabled or too old, get help paying for it, don’t have that Premium deducted. For instance, I suffer a chronic illness and can’t work so my State posts the Premium for me. However, there was a period when I COULD work and those paychecks had FICA deducted, but NOT the Premium because it was a trial period to see if I could handle a long term job. I couldn’t. I got sick again after 6 mos but that little bit of time meant that my benefits went up the following year by $15.
      I don’t know if you look at your Benefit Statements all that closely but if you don’t, do it now and you you might see how much your working wages increase your benefits. If they’re NOT increasing your benefits you might want to go go check out the benefits calculator that’s online here, on this site. I don’t have the link but I’ll go find it and post it as a reply.
      I’m glad you’re still able to work! What I wouldn’t give for that blessing!! I’m only 53 and I’ve been disabled since I was 25. I qualified for SSDI because i was earning a paycheck since age 15 to support a disabled parent so a blessing in disguise, right?

    • Jessie

      I’m back.
      The BEST way I see for you to check on your benefits and ANY confusion or questions you might have, is to create an account. It seems easy and they’ve made it even easier because they used to make it mandatory that one HAD to have a cell phone to verify your account. Not any more. This way, by creating your own account, you’ll know that what you’re earning is actually going into YOUR account and no one else’s.
      There’s help online if you need it.
      Good luck!

      • Ray F.

        Open a my Social Security account today and rest easy knowing that you’re in control of your future.

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