Coverage threshold definition |
A coverage threshold is an amount of earnings that
triggers coverage under the Social Security program. Earnings below
the threshold are not taxable under Social Security nor do such earnings
count toward future benefits. |
Domestic employee coverage
threshold for 2005 |
The domestic employee coverage threshold amount
for 2005 is $1,400. By law, the domestic employee
coverage threshold amount for 2005 shall be equal to the 1995 amount
of $1,000 multiplied by the ratio of the national
average wage index for 2003 to that for 1993. If the amount
so determined is not a multiple of $100, it is rounded to the next lower
multiple of $100.
Calculation details
Amounts in formula |
1995 threshold | $1,000 |
1993 average wage index | $23,132.67 |
2003 average wage index | $34,064.95 |
Computation | $1,000 times $34,064.95
divided by $23,132.67 equals $1,472.59, which
rounds down to $1,400. |
|
Election worker coverage
threshold for 2005 |
The election worker coverage threshold amount for
2005 is $1,200. By law, the election worker coverage
threshold amount for 2005 shall be equal to the 1999 amount of $1,000
multiplied by the ratio of the national average wage
index for 2003 to that for 1997. If the amount so determined
is not a multiple of $100, it is rounded to the nearest multiple
of $100.
Calculation details
Amounts in formula |
1999 threshold | $1,000 |
1997 average wage index | $27,426.00 |
2003 average wage index | $34,064.95 |
Computation | $1,000 times $34,064.95
divided by $27,426.00 equals $1,242.07,
which rounds to $1,200. |
|
Coverage thresholds for the last
few years |
A table of
wage-indexed amounts includes both domestic employee
and election worker coverage thresholds. |
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