FICA is a Federal INSURANCE Contributions Act tax. It was established in 1935 by Franklin D. Roosevelt as part of the Social Security program.
It is also known as OASDI (Old Age Survivors Disability Insurance).
The goal is to provide protection to ELIGIBLE workers and their dependents against financial loss due to old age, disability, or death.
Most FICA withholdings are done through payroll taxes. The gross amount of your paycheck is subject to 6.2% of Social Security withholding and 1.45% of Medicare taxes.
FICA deducts 7.65% from the gross amount of your paycheck. Employers are required to match the same percentage and remit it to the Government, yielding a total rate of 15.3%.
Who is ELIGIBLE for receiving Social Security, Medicare and Survivors benefits?
The type and amount of benefits are determined by calculating the credits or QCs (Quarters of Coverage) a worker has earned.
To be FULLY INSURED, 40 credits are required. This is equivalent to 10 years of work.
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