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Social Security reduces maximum taxable wage for 2018

The Social Security Administration (SSA) has announced a correction to the wage base for 2018. The maximum amount of earnings subject to Social Security tax for 2018 has been reduced to $128,400, down from the previous $128,700 announced on Oct. 13, 2017.

The Medicare tax rate for 2018 will remain at 1.45 percent of all covered earnings for employers and employees. For wages more than $200,000, the Additional Medicare Tax of 0.9 percent applies to earned income of more than $200,000 ($250,000 for married couples filing joint).

According to the SSA, the lower taxable amount is due to corrected W-2s provided to Social Security in late October by a national payroll service provider, which resulted in changes to the data used by SSA to determine the taxable wage base.

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