On January 1, the maximum amount of annual earnings subject to the Social Security tax – a.k.a. the payroll tax cap – was adjusted for inflation and increased to $113,700. Income above the cap is not taxed by Social Security. To help alleviate Social Security’s long-term budget shortfall, raising – or even eliminating – the cap has gotten some attention from policy makers. Just 1 in 20 workers would be affected if the cap were eliminated entirely, and only 1 in 75 would be affected if the cap were applied to earnings over $250,000.
For more, check out the report, "Raising the Social Security Payroll Tax Cap: How Many Workers Would Pay More?"