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.
If any topics covered in this newsletter raise questions or if there are other accounting or tax matters on your mind, Gates Kirby & Company is always happy to provide guidance tailored to your unique situation. Our team genuinely enjoys helping clients navigate these topics with confidence. We look forward to connecting with you soon.
- Gates, Kirby & Company.
Tax laws, regulations, and interpretations can change without notice. Due to changing tax laws the content may be considered historical. Newsletter articles provide no guarantee information are complete, accurate, or current. Readers should verify applicable rules by consulting official sources (e.g., IRS, Colorado Department of Revenue) and/or consult with Gates Kirby to review how the content in the article content may be applicable to your tax situation.