In October, the 2018 FICA taxable wage base (the maximum amount of an employee’s wages with respect to which the Old-Age, Survivor and Disability Income portion of FICA taxes is payable) had been announced as $128,700, up from this year’s $127,200. On November 27, the Social Security Administration announced that it was lowering the previously calculated amount, and that the 2018 taxable wage base would instead be only $128,400.

The reason given for this unusual change was that the wage base, which reflects national average wages, had to be recalculated when a good deal of salary data that had not been included in the original calculations was received after applicable deadlines. Although small, the resulting revision was not inconsequential.

In an unrelated action, the Internal Revenue Service also made a change to one of its indexed factors that had been announced in October. (See our prior Alert dated October 23, 2017, available here.) The factor by which a defined benefit plan participant’s compensation is increased when applying the Section 415(b) 100%-of-compensation limit to participants who separated from service before 2018 has been changed from 1.96% to 1.97%.