Social Security COLA: Latest Updates From The Government Here

Maximum Taxable Earnings Will Be Higher for Those Still Working

Anyone who has received a paycheck knows that a percentage of that check is automatically withheld to pay Social Security taxes. The US government sets a limit on how much of your wage is subject to the Social Security tax.

The Social Security tax limits will increase to $160,200 in 2023 from $147,000 in 2022. This means that the maximum amount of Social Security tax that will be withheld from an employee’s paycheck in 2023 is $9,932 ($160,200 x 6.2%).

Change to Earnings Test Exempt Amounts

Social Security withholds benefits if you’re under the full retirement age and your earnings exceed a certain level. This is known as the retirement earnings test exempt amount. There are two different exempt amounts—a lower one in the years before reaching the full retirement age and a higher one in the year you reach the full retirement age.

If you’re under FRA, the earnings test exempt amount increases from $1,630 a month in 2022 to $1,770 a month in 2023. If you have reached FRA, the amount increases from $4,330 a month in 2022 to $4,710 a month in 2023.