10 Nov 2026 SOCIAL SECURITY AND MEDICARE CHANGES
The Social Security Administration (SSA) has announced updates to key limits and benefits starting January 2026. Below is a summary of what’s changing and how it may affect you.
Social Security Wage Limit
In 2026, earnings up to $184,500 will be subject to Social Security tax. This is an increase from $176,100 in 2025. Both employees and employers will each pay 6.2% on these earnings, which amounts to a maximum of $11,439 for each in 2026—an increase of $521 over last year.
Medicare Taxes
The Medicare tax rate remains the same at 1.45% for both employees and employers, and there is still no income cap. Individuals earning more than $200,000 ($250,000 for married couples filing jointly) will continue to pay an additional 0.9% Medicare tax on income above those thresholds.
Self‑Employed Individuals
If you’re self‑employed, you’ll continue to pay both the employee and employer portions of Social Security and Medicare taxes. This equals a total self‑employment tax of 15.3%—12.4% up to the $184,500 wage base and 2.9% on all earnings. You may still claim a deduction for half of this amount on your tax return.
Cost‑of‑Living Adjustment (COLA)
Social Security and Supplemental Security Income (SSI) recipients will receive a 2.8% increase in benefits beginning January 2026, following last year’s 2.5% adjustment.
Earnings Limits for Retirees
If you’ll reach full retirement age in 2026, you can earn up to $65,160 during the year without a reduction in benefits. Benefits will be reduced by $1 for every $3 earned above that limit. For those who are under full retirement age, the earnings limit will rise to $24,480 per year, with benefits reduced by $1 for every $2 earned above that amount.
Maximum Monthly Benefit
The maximum Social Security benefit for someone retiring at full retirement age will increase to $4,152 per month in 2026, up from $4,018 in 2025.
If you have questions about how these tax changes or other accounting changes may affect your personal or business situation or retirement planning, please contact Gates Kirby & Company.