What’s new for Social Security and Medicare in 2021
Increased payroll taxes for high-income workers likely
President-elect Joe Biden would increase payroll taxes for those earning over $400,000, according to the tax plan he released before the election. His plan imposes a 12.4 % Social Security payroll tax on income earned above $400,000, evenly split between employers and employees. This would create a “donut hole” in the payroll tax where wages between $142,800--the current wage cap for 2021--and $400,000 are not taxed.