Social Security payroll tax cap set to increase for 2023
The Social Security Administration in late 2022 announced an 8.7% Cost of Living Adjustment for 2023. Along with that increase comes something not many people may be aware of, an increase in the Social Security payroll tax cap.
For those unaware, the payroll tax cap is the maximum earnings that are subject to Social Security benefits. In 2021, that payroll tax cap was $142,800. For 2022, it increased to $147,000. In 2023, that amount jumps to $160,200.
With the higher cap, more revenue will be generated from high-income households. Until the Social Security Trustees release their annual report, we will not know if this changes the projected insolvency date. That report is typically released in June.
For more information, please reach out to the Professionals at The Center for Financial, Legal, & Tax Planning Inc., at (618) 997-3436.