Automatic Increases
Wage-indexed amounts
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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 |
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