On October 15, 2010, the Social Security Administration (SSA) announced that the 2011 wage base for computing Social Security tax will remain $106,800. There will also be no change to the retirement earnings tax exempt amount. Thus, as in the prior calendar year, an individual may earn $1,180 monthly ($14,160 annually) before reaching Social Security normal retirement age and $3,140 monthly ($37,680 annually) after reaching Social Security retirement age.
A few select tax rates for employers and employees that remain unchanged are listed below:
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The Social Security Act provides for an automatic increase in these benefits if there is an increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW) from the third quarter of the last year a cost-of-living adjustment (COLA) was determined to the third quarter of the current year. There was no increase in the CPI-W from the third quarter of 2008, the last year a COLA was determined, to the third quarter of 2010; therefore, under existing law, there can be no COLA in 2011. Since there is no COLA, the statute also prohibits a change in the maximum amount of earnings subject to the Social Security tax as well as the retirement earnings test exempt amounts.