2020 Social Security Adjustments

by Barry L Weller, EA

Social Security announced the cost-of-living adjustment for 2020 will be an increase of 1.6%.  In January 2020, nearly 69 million American’s Social Security benefits will include the COLA increase.  The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.  Social Security beneficiaries will be notified by mail in December 2019 of their new 2020 benefit amount.  Social Security beneficiaries who have a “my Social Security” account can view their COLA notice online at www.socialsecurity.gov/myaccount. 

Workers will see an increase in the maximum amount of their earnings being subject to the Social Security tax.  In 2020, workers will pay the Social Security (OASDI) tax on $137,700 of earnings.  This amount is up $4,800 from the 2019 maximum taxable wage amount of $132,900.  The tax rate remains at 6.2%.

Medicare premiums are also increasing in 2020.  The Medicare Part B standard monthly premium will be $144.60 in 2020.  This is an increase of $9.10 from the 2019 standard monthly premium of $135.50 per month.  The following table shows the income-related monthly adjustment amounts (IRMAA) for Part B premiums for 2020.  IRMMA kicks in when your modified adjusted gross income (MAGI) exceeds certain income levels.

Barry L Weller, EA is the president of Barry Weller & Associates, Inc. with offices at 19 N Reading Ave, Boyertown, PA 19512   Phone (610) 367-8280    He is an enrolled agent, licensed to represent taxpayers before the IRS.     (updated 11/17/2019)