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Automatic Increases
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Quarter of Coverage

Automatic Increases

Wage-indexed amounts

Latest amount & QC explanation
The amount of earnings required for a quarter of coverage (QC) in 2008 is $1,050. "Quarter of coverage" is a legal term, but you may also see the term "Social Security credit" (or just "credit") used elsewhere. A QC is the basic unit for determining whether a worker is insured under the Social Security program. No matter how high your earnings may be, you can not earn more than 4 QC's in one year.

History
See historical series of earnings needed to earn one quarter of coverage, 1978-2008.

For years before 1978, an individual generally was credited with a quarter of coverage for each quarter in which wages of $50 or more were paid, or an individual was credited with 4 quarters of coverage for every taxable year in which $400 or more of self-employment income was earned. Beginning in 1978, employers generally report wages on an annual, instead of quarterly, basis. With this change to annual reporting, the law provided that a quarter of coverage be credited for each $250 of an individual's total wages and self-employment income for calendar year 1978 (up to a maximum of 4 quarters of coverage for the year). After 1978, the amount of earnings needed for a quarter of coverage increases automatically each year with increases in the national average wage index.

Determination of the quarter of coverage amount for 2008
The law specifies that the quarter of coverage (QC) amount for 2008 is equal to the 1978 amount of $250 multiplied by the ratio of the national average wage index for 2006 to that for 1976, or, if larger, the 2007 amount of $1,000. If the amount so determined is not a multiple of $10, it shall be rounded to the nearest multiple of $10.

Calculation details
Amounts in
formula
1978 earnings for one QC$250
1976 average wage index$9,226.48
2006 average wage index$38,651.41
Computation$250 times ($38,651.41 divided by $9,226.48) equals $1,047.30, which rounds to $1,050.
Higher amount$1,050 exceeds $1,000, so the earnings needed to earn one QC in 2008 is $1,050

Amount of earnings needed to earn one quarter of coverage
Year Earnings
1978 $250
1979 260
1980 290
1981 310
1982 340
1983 370
1984 390
1985 410
1986 440
1987 460
1988 470
1989 500
1990 520
Year Earnings
1991 $540
1992 570
1993 590
1994 620
1995 630
1996 640
1997 670
1998 700
1999 740
2000 780
2001 830
2002 870
2003 890
Year Earnings
2004 $900
2005 920
2006 970
2007 1,000
2008 1,050

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Last reviewed or modified Tuesday Mar 18, 2008