Internal Revenue Bulletin:  2008-46 

November 17, 2008 

Notice 2008-103

Social Security Contribution and Benefit Base for 2009


Under authority contained in the Social Security Act (“the Act”), the Commissioner, Social Security Administration, has determined and announced (73 F.R. 64651, dated October 30, 2008) that the contribution and benefit base for remuneration paid in 2009, and self-employment income earned in taxable years beginning in 2009 is $106,800.

“Old-Law” Contribution and Benefit Base

General

The “old-law” contribution and benefit base for 2009 is $79,200. This is the base that would have been effective under the Act without the enactment of the 1977 amendments.

The “old-law” contribution and benefit base is used by:

(a) The Railroad Retirement program to determine certain tax liabilities and tier II benefits payable under that program to supplement the tier I payments which correspond to basic Social Security benefits,

(b) the Pension Benefit Guaranty Corporation to determine the maximum amount of pension guaranteed under the Employee Retirement Income Security Act (section 230(d) of the Act),

(c) Social Security to determine a year of coverage in computing the special minimum benefit, as described earlier, and

(d) Social Security to determine a year of coverage (acquired whenever earnings equal or exceed 25 percent of the “old-law” base for this purpose only) in computing benefits for persons who are also eligible to receive pensions based on employment not covered under section 210 of the Act.

Domestic Employee Coverage Threshold

General

The minimum amount a domestic worker must earn so that such earnings are covered under Social Security or Medicare is the domestic employee coverage threshold. For 2009, this threshold is $1,700. Section 3121(x) of the Internal Revenue Code provides the formula for increasing the threshold.

Computation

Under the formula, the domestic employee coverage threshold amount for 2009 shall be equal to the 1995 amount of $1,000 multiplied by the ratio of the national average wage index for 2007 to that for 1993. If the resulting amount is not a multiple of $100, it shall be rounded to the next lower multiple of $100.

Domestic Employee Coverage Threshold Amount

Multiplying the 1995 domestic employee coverage threshold amount ($1,000) by the ratio of the national average wage index for 2007 ($40,405.48) to that for 1993 ($23,132.67) produces the amount of $1,746.68. We then round this amount to $1,700. Accordingly, the domestic employee coverage threshold amount is $1,700 for 2009.

Note

(Filed by the Office of the Federal Register on October 29, 2008, 8:45 a.m., and published in the issue of the Federal Register for October 30, 2008, 73 F.R. 64651)


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