RM 01310.025 How We Derive Aggregate Estimated Social Security Taxes for the Social Security Statement

A. Introduction

This section explains how the Statement system uses the Federal Insurance Contributions Act (FICA) and Self-Employment Contributions Act (SECA) tax rates to derive the estimated aggregate Social Security tax contribution amount shown at the bottom of page 3 on the Social Security Statement.

B. Policy

Self-employment income (SEI) and agricultural employment are not applicable in years prior to 1951. MQGE earnings cannot be used to derive Social Security (Retirement, Survivors and Disability Insurance, or RSDI) taxes. Statement system computes the tax on earnings up to the maximum taxable amount posted to the MEF for each given year. The final computed tax amount must be rounded down to the nearest dollar.

EXAMPLE: If the final computed RSDI tax amount is $496.96, then the amount that will be displayed on the Statement will be $496. (No cents are displayed on the Statement).

Because railroad earnings are FICA earnings, taxes on these earnings since 1973 are calculated at the FICA rate. Prior to 1973, the tax rate for railroad earnings was actually different than the FICA rate, but the Statement 2001 system cannot determine the correct rate; therefore, taxes for railroad earnings will not be computed or displayed until 1973.

Statement 2001 totals the yearly tax amounts for an aggregate tax amount and displays this total on the statement. It also computes and displays an aggregate total for the corresponding taxes paid by the SSN holder's employers on the posted wages.

C. Kinds of Tax Tables

1. FICA RSDI Tax Table

The system uses this table to determine the appropriate FICA tax rate for RSDI:

YEAR	FICA RSDI TAX RATE
1937 through 1950	.01
1951 through 1953	.015
1954 through 1956	.02
1957 through 1958	.0225
1959	.025
1960 through 1961	.03
1962	.03125
1963 through 1965	.03625
1966	.0385
1967	.039
1968	.038
1969 through 1970	.042
1971 through 1972	.046
1973	.0485
1974 through 1977	.0495
1978	.0505
1979 through 1980	.0508
1981	.0535
1982 through 1984	.054
1985 through 1987	.057
1988 through 1989	.0606
1990 and after	.062

2. SECA RSDI Tax Table for RSDI

The system uses this table to determine the appropriate SECA tax rate.

YEAR	SECA RSDI TAX RATE
1937 through 1952	Not Applicable
1953	.0225
1954 through 1956	.03
1957 through 1958	.03375
1959	.0375
1960 through 1961	.045
1962	.047
1963 through 1965	.054
1966	.058
1967	.059
1968	.058
1969 through 1970	.063
1971 through 1972	.069
1973 through 1977	.070
1978	.071
1979 through 1980	.0705
1981	.08
1982 through 1983	.0805
1984	.087
1985	.091
1986 through 1987	.094
1988 through 1989	.1012
1990 and after	.124

D. Process — RSDI Tax Rate

The system uses the following rules to determine how the applicable RSDI tax rate is to be applied:

When the MEF Indicates...	Then the System Uses the Applicable RSDI Tax Rate...
Earnings for years 1951 and/or 1952	FICA
Only FICA earnings posted for the year	FICA
Only SECA earnings posted for the year	SECA
Both FICA and SECA earnings posted for the year	FICA
Combinations of FICA, SECA and MQGE earnings are posted for a year	The FICA tax rate or SECA tax rate must be applied only to the FICA/SECA earnings according to the rules indicated above. The MQGE earnings will not be considered.

E. Process — Estimated RSDI Tax

The system determines the estimated RSDI tax as follows:

When the Tax Year Is...	Then the System...
1937 - 1950	• Applies the applicable FICA RSDI tax rate to the total amount of earnings in this period as follows: 37-50 Earnings X 37-50 FICA RSDI Tax Rate = 37-50 Estimated RSDI Tax
1951 and 1952	• Applies the applicable FICA RSDI tax rate to the earnings in each year as follows: 195(Y) Earnings X 195(Y) FICA RSDI Tax Rate = 195(Y) Estimated RSDI Tax
1953 - 1977	• Determines the type of earnings posted to the record. (See RM 01310.025F.) • Applies the applicable FICA RSDI tax rate to the years in which FICA earnings have been determined, as follows: • CCYY FICA Earnings X CCYY FICA RSDI Tax Rate = CCYY Estimated RSDI Tax • Applies the applicable SECA RSDI tax rate to the years in which SECA earnings have been determined, as follows: CCYY SECA Earnings X CCYY SECA RSDI Tax Rate = CCYY Estimated RSDI Tax
1978 to date	• Determines the type of earnings posted to the record. (See RM 01310.025F.) • Applies the applicable FICA RSDI tax rate to the years in which FICA earnings have been determined, as follows: CCYY FICA Earnings X CCYY FICA RSDI Tax Rate = CCYY Estimated RSDI Tax • Applies the applicable SECA RSDI tax rate to the years in which SECA earnings have been determined, as follows: CCYY SECA Earnings X CCYY SECA RSDI Tax Rate - CCYY Estimated RSDI Tax

F. Process — Treatment of Posted Earnings

1. 1953-1977

This is how the system determines the type of earnings posted for years 1953 through 1977:

When the QC Pattern for the year is...	And the self- employment indicator is...	Then, all earnings posted for the year are treated as...
SSSS, SSSN, SSNN, SNNN, SSSR, SSRR, SRRR	1-4 or Z	SECA Earnings
CCCC, CCCN, CCNN, CNNN	0-4 or Z	FICA Earnings
NNNN, NNNR, NNRR, NRRR, RRRR	(N/A)	(N/A)
Any other combination	(N/A)	FICA Earnings

2. Years 1978 to Date

This is how the system determines the type of earnings posted for years 1978 to date:

When the Self-Employment Indicator on the MEF is...	Then, all earnings posted for the year are treated as...
A (SEI only)	SECA Earnings
B (SEI only)	SECA Earnings
C (SEI only)	SECA Earnings
N (No SEI)	FICA Earnings
Q (FICA only)	FICA Earnings
R (FICA & SEI)	FICA Earnings
S (FICA & SEI)	FICA Earnings
T (FICA & SEI)	FICA Earnings

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0101310025

RM 01310.025 - How We Derive Aggregate Estimated Social Security Taxes for the <Italic>Social Security Statement</Italic> - 07/25/2002
Batch run: 03/29/2017
Rev:07/25/2002

Program Operations Manual System (POMS)