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Tax season is around the corner: Prepare with tax and savings limits changes, Social Security deductions and more

November 13, 2019 by Employee Services

The New Year is almost here. Prepare by taking a few minutes to review 2020 Social Security deductions and contribution limit increases, then see tax rates and how much you’ll be able to save for retirement, health care and childcare.

Social Security deductions and contribution limit increases

  • Social Security will resume Jan. 1, 2020 for employees who earned more than $132,900 in 2019. Remind employees who fall into this category, as January 2020 paychecks will reflect resumed contributions. 
  • The Social Security tax rate will remain 6.2 percent, and the maximum taxable earnings for Social Security will increase to $137,700, at which point the withholdings will stop.
  • Medicare will continue to be withheld at 1.45 percent on all earnings. Employees with earnings in excess of $200,000 for single filers and $250,000 for married couple filing together, will also be subject to an additional 0.9 percent Medicare tax.

2020 tax rates and savings limits

Social Security and Medicare CU 401a Mandatory Retirement Plan
Social Security maximum taxable earnings:
$137,700

Social Security tax rate for employees and employers:
6.2%

Social Security withholding maximum:
$8,537.40

Medicare tax rate for employees and employers:
1.45%

Additional Medicare Tax on salaries above $200,000 (single)
or $250,000 (married filing jointly):
0.9%		 Employee contribution:
5%

CU’s contribution:
10%

Maximum contribution:
$57,000

Salary limit:
$285,000
PERA Mandatory Retirement Plans Voluntary Retirement Plans
Employer:
10.4% (Jan. - June 2020)
10.9% (July – Dec. 2020)

Employee:
8.7% (Jan. – June 2020)
10% (July – Dec. 2020)		 CU 403(b), PERA 457 and PERA 401k maximum contribution:
$19,500

CU 403(b), PERA 457 and PERA 401k catch up contribution for employees over 50:
$6,500
Health Savings Account Limits Dependent Care Flexible Spending  Account Limit
Single coverage:
$3,550

Family coverage:
$7,100

Catch up contributions (age 55+):
$1,000		 $5,000
Health Care Flexible Spending Account Limit
$2,750

To see additional year-end information, dates and deadlines, visit the Employee Services website.

 

Tags: 
year-end, year end, taxes, Contribution limits, 2020, social security, hsa, fsa, health savings account, flexible spending accounts, tax season 2020

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