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. Michael F.

    I will be 61 in May, I get SSI now,346. A month,so when am I eligible to apply,as I want to start it at 62. Will this be ok??.Thank you and enjoy day.

    • Ray F.

      Thank you for contacting us, Michael. Please keep in mind that the Supplemental Security Income (SSI) is a needs-based program that pays benefits to disabled individuals based on financial need. If you’re receiving benefits under the SSI program now, but you’re also insured and qualify for retirement benefit on your own record, you are required to apply for those benefits at age 62.
      We hope this information helps.

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  5. Lucy R.

    I am 80 years old, If I begin working now, how much can I earn without paying taxes.

  6. F A.

    I am working part time & retired . no deductions in my pay check. Will I receive an increase in my SSS monthly benefit after I file my income tax which includes my annual income from my part time job?

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  8. tammy

    Social 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?”
    WELL, THANK GOD SHE CAN WORK and she was not born an ADULT DISABLED CHILD who is physically disabled! If she was born an “adult disabled child”, then she COULD NOT MARRY any abled bodied person that she wanted to= OR SHE WOULD LOOSE ALL HER BENEFITS!!!

    How fair, understanding and compassionate does that sound? Answer = IT DOES NOT!

    Who cares if her physically disabled daughter (who is free to make decisions on her own) decides to marry an able bodied person, it’s her business to do so, right?
    ANSWER= WRONG!

    It is just another form of DISCRIMINATION that is being allowed to operate openly under the SOCIALIST SECURITY SYSTEM!

    The Socialist Security system can’t even fix an outdated “RULE” that they use to justify discrimination against physically disabled people.

    If you are a physically disabled person (an adult disabled child) and you happen to marry an “able bodied person” you will be loosing out on a lifetime of benefits, all because of a one word “rule” that prohibits you from marrying an “able bodied person”. Best of all, they never tell you about their “Rule” so that they can justify cutting off any benefits that you may be due.

    Because you are physically disabled (adult disabled child) and you choose not to marry another adult disabled child or disabled person drawing off socialist security, you WILL LOOSE ANY AND ALL BENEFITS FOR LIFE. This means that the SOCIALIST SECURITY system is TELLING YOU WHO YOU ARE ALLOWED TO MARRY and who you are
    NOT ALLOWED TO MARRY! It is a discriminatory act “rule” and should be ILLEGAL!

    Even though I am permanently and totally disabled, if I marry an “able bodied person”, somehow that marriage makes everything ok and I am no longer considered disabled (in the eyes of the socialist security system). Magically (because I married an able bodied person), the pixie fairies come down and cure my disability, because now I can just go out and find gainful employment, no one will discriminate against my physical disability and everything will be grand, right? Somehow magically, marrying an able bodied person makes my physical disablility dissappear and now I am cured, right? WRONG!

    The issue is a special “Rule” that the Socialist Security System uses to discriminate against “certain” people. If you are a “physically disabled person” (AKA-certain people) and happen to marry an able bodied person, then the SOCIALIST SECURITY system will use special “Rules” to legally discriminate against you and deny you benefits, even if you appeal online.

    The SOCIALIST SECURITY system has caused me a lot of economic hardship all because I married an able bodied person. The SOCIALIST SECURITY system thinks someone who is physically disabled (permanently and totally disabled) marries an “able bodied person”, that somehow magically they are cured of their physical disability and two people can survive off the able bodied persons income. WOW, talk about a bunch of bureaucratic idiotic thinking, that somehow this would not cause a financial hardship….. amazing.

    The rules that the Social Security Administration uses to legally discriminate against persons who are “Adult Disabled Children” who happen to marry an able bodied person, are discriminatory. This is loosely referred to as the “marriage penalty” but I call it exactly what it is, a legal form of discrimination.
    I firmly believe this rule, is an act of bias, prejudice and discrimination against people who (by no fault of their own) are born disabled and happen to marry an able bodied person

    Please write your Congressional Representative and tell them to end this modern day form of Legal Discrimination. In this day of fairness and equality, there are still some people suffering from an outdated and oppressive bureaucratic rule.

    (PS. notice how the only thing any of these SOCIALIST SECURITY workers ever say are quotes of the rules or processes, like a worker drone. They are unable to address any topics that fall outside of their rule books). Typical bureaucracy and bureaucratic responses, like trying to argue over lost change with a vending machine!

  9. Andy M.

    I was hit by a car and am now permanently disabled. I am on SSDI. When I become retirement age, will I need to apply for SSI too? Will I lose my SSDI? Will I be receiving both? I worked for several decades.

    • Kenny O.

      Hello Andy. Your Social Security Disability benefit will automatically convert to become retirement benefits when you reach your full retirement age. Current law does not allow a person to receive both retirement and disability benefits on one earnings record at the same time. For more information, please see our Frequently Asked Questions.

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