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In a rare move, the Social Security Administration on Nov. 27 lowered the 2018 Old-Age, Survivors and Disability Insurance taxable wage base to $128,400 from $128,700, an amount that was announced Oct. 13.
The move by the agency stemmed from corrected Forms W-2, Wage and Tax Statement, that were provided in late October by a large payroll-service provider. The agency did not release the name of the provider.
“Approximately 500,000 corrections for W-2s from 2016 resulted in changes for three items based on the national average wage: the 2018 taxable maximum, primary insurance amount bend points--figures used in the computation of Social Security benefits--and family maximum bend points,” the agency said in a news release. “No other items based on national average wages were affected.”
Based on the new amount, the maximum 2018 OASDI portion of the Federal Insurance Contributions Act tax payable by each employee is $7,960.80, or 6.2 percent of the wage base. Under the OASDI amount released in October, the employee portion was to be $7,979.40. Employers match the employee amount with an equal contribution. The OASDI wage base for 2017 is $127,200.
There was no change to the cost-of-living adjustment for 2018, which is to increase by 2 percent. The cost-of-living adjustment, affecting several thresholds for benefits and coverage, is linked to the increase in the consumer price index as determined by the Labor Department Bureau of Labor Statistics and not the national average wage.
The number of W-2s processed by the SSA already has surpassed the total processed in 2016. About 253 million 2016 W-2s were processed through Oct. 5, up from the 247 million 2015 forms processed by the end of 2016, said Scott Pedersen, SSA program manager.
The agency processed 2.8 million Forms W-2c, Corrected Wage and Tax Statements, up from about 2.1 million in 2016, Pedersen said Oct. 5 during an Internal Revenue Service payroll industry teleconference. Some of the increase likely could be attributed to the earlier due date of Jan. 31 that employers had to meet for filing 2016 W-2s, he said. In prior years, W-2s could be filed as late as the last day of February or, if filing electronically, the last day of March.
The IRS moved up the W-2 deadline in an effort to prevent fraud and safeguard personal tax information. During the 2016 filing season, for example, the IRS found that about 300,000 W-2s were compromised from an email phishing scam. Many states have followed the IRS move, requiring that employers file W-2s with the state by Jan. 31.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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