Year 2017 Changes Announced by the Social Security Administration:

1.       Social Security Wages: 

• Wage base increases to $127,200 for Year 2017 from $118,500 for Year 2016 ($8700 increase).

2.       Medicare Wages:

• There is no change for Year 2017 from Year 2016.  All wages are subject to 1.45% tax and wages in excess of $200,000 will be subject to an extra .09% Medicare tax that will be withheld ONLY from employees’ wages.

3.       Self-Employed Individuals:

•       Social Security Wage Base for Year 2017:  $127,200.
•       Medicare Tax:  Year 2017:  no limit
•       Self-Employment Tax for Year 2017:  15.3% (combined social security rate of 12.4% and Medicare rate of 2.9%) up to the social security wage base.  

4.       Domestic, Election Workers:

•       Threshold for coverage under Social security and Medicare for domestic employees (“Nanny tax”) will be $2,000 in Year 2017.
•       Threshold for election works will be $1800 in Year 2017 (up from $1700 in Year 2016)

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Moreover, please remember that not only are W-2s due to employees by January 31, 2017 but also the tax filing is also due the IRS by January 31, 2017. 

From 2016 General Instructions for Forms W-2 and W-3 ( https://www.irs.gov/pub/irs-pdf/iw2w3.pdf ) :

New due date for filing with SSA. The due date for filing 2016 Forms W-2, W-2AS, W-2CM, W-2GU, W-2VI, W-3 and W-3SS with the SSA is now January 31, 2017, whether you file using paper forms or electronically.

Extensions of time to file. Extensions of time to file Form W-2 with the SSA are no longer automatic. For filings due on or after January 1, 2017, you may request one 30-day extension to file Form W-2 by submitting a complete application on Form 8809, Application for Extension of Time to File Information Returns, including a detailed explanation of why you need additional time and signed under penalties of perjury. The IRS will only grant the extension in extraordinary circumstances or catastrophe. See Extension to file for more information. This does not affect extensions of time to furnish Forms W-2 to employees. See Extension of time to furnish Forms W-2 to employees for more information.

Dennis L. Day, CPA.CITP, CGMA

Birmingham Chapter of the Payroll Association

Board Member – Government Liaison

205-533-9458