Tuesday, July 13, 2021

What does FICA mean?

 This in one of the more common questions i get about Social Security. This question and answer are right from the ssa.gov website. Q17:  What does FICA mean and why are Social Security taxes called FICA contributions?

A:  Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). The payroll taxes are sometimes even called "FICA taxes." In the original 1935 law the benefit provisions were in Title II of the Act and the taxing provisions were in a separate title, Title VIII. As part of the 1939 Amendments, the Title VIII taxing provisions were taken out of the Social Security Act and placed in the Internal Revenue Code. Since it wouldn't make any sense to call this new section of the Internal Revenue Code "Title VIII," it was renamed the "Federal Insurance Contributions Act." So FICA is nothing more than the tax provisions of the Social Security Act, as they appear in the Internal Revenue Code.

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