When you have wages or self-employment income that is covered by Social Security, you pay Social Security taxes each year up to a maximum amount that is set by law. That amount has changed frequently over the years.
For 2016, the maximum amount of taxable earnings is $118,500.
The maximum earnings for each year since Social Security taxes were first collected in 1937 are shown below. If you:
earned more than the maximum in any year but had only one job, the amount we use will be just the maximum amount.
had more than one job, the total that is recorded may be more than the maximum. However, we only use the maximum amount to calculate your benefit estimates.
Note: When you have more than one job in a year, each of your employers must withhold Social Security taxes from your wages without regard to what the other employers may have withheld. You may then end up with total Social Security taxes withheld that exceed the maximum.
Example: In 2016 you worked at company A and earned $70,000 before you switched employers. At company B, you earned $56,000.
Social Security taxes would be withheld from the $126,000 you earned in 2016, but the maximum taxable earnings for the year are only $118,500.
You claimed a refund of the Social Security taxes withheld from the last $7,500 in earnings when you filed your 2016 personal income tax return with the Internal Revenue Service.