The Social Security Administration (SSA) has announced that Social Security and Supplemental Security Income (SSI) benefits will increase by 1.7 percent in 2015. The rates for Old-Age, Survivors and Disability Insurance (OASDI) and Medicare Hospital Insurance (HI) taxes will remain at a combined 7.65 percent in 2015. Based on the increase in SSI benefits, the maximum taxable earnings for OASDI purposes will increase from $117,000 to $118,500.
The SSA cost-of-living adjustments (COLAs) are based on the rise in the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2013 through the third quarter of 2014. For Social Security beneficiaries, the average monthly benefit amount for all retired workers will increase from $1,306 to $1,328. The monthly SSI federal payment standard for an individual will increase from $721 to $733; for a couple, the payment will increase from $1,082 to $1,100. For the year in which an individual attains full retirement age, the retirement earnings test exempt amount will increase from $41,400 a year to $41,880 a year. The test applies to earnings from the months prior to when the individual reaches full retirement age. One dollar in benefits will be withheld for every $2 in earnings above the limit. No limit on earnings will be imposed beginning in the month in which the individual reaches full retirement age.
For retirees under full retirement age, the retirement savings test exempt amount will increase from $15,480 a year to $15,720 a year, with $1 withheld for every $2 in earnings above the limit.
For 2015, taxpayers with a household employee may pay up to $1,900 in wages per quarter before the requirement to withhold and pay the OASDI and HI taxes on the employee’s behalf applies. This amount is unchanged from 2014.
