The Federal Insurance and Self-Employment Contribution Acts (FICA and SECA) require the withholding of taxes from wages of employed persons and the net earnings of most self-employed persons for the Social Security and Medicare programs. In 2001, earnings up to $80,400 in covered employment were subject to Social Security (Old-Age, Survivors, and Disability Insurance, OASDI) taxes. There was no limit on annual earnings subject to Medicare Part A (Hospital Insurance, HI) taxes.
Under Social Security, the tax rate was the same (6.2 percent) for both employees and employers. The rate for self-employed workers equaled the combined employee and employer rate of 12.4 percent. Under Medicare, the rate was also the same (1.45 percent) for both employees and employers. For self-employed workers it was 2.9 percent.
The amount of Social Security taxable earnings is determined first by counting wage and salary earnings and then any self-employment income up to the taxable maximum. The amount of taxes includes both the employee and employer shares for Social Security.
Data in this report are not adjusted for multiemployer tax refunds. Employees pay taxes on their earnings up to the annual taxable amount for each employer that they work for during the year. Employees who work for two or more employers and earn more than the annual maximum taxable amount over the course of the year pay excess contributions that are later refunded. Corresponding employer contributions are not refunded.
Two deduction provisions reduce the SECA and income tax liability of self-employed persons, with the intent of treating them the same as employees and employers for purposes of Social Security and income taxes. Taxable net earnings from self-employment is determined by reducing net profit from self-employment by an amount equal to net profit times one-half of the combined SECA tax rate. The resulting amount is not taxable for Social Security if less than $400. In addition, self-employed persons may deduct one-half of their SECA taxes as an adjustment to income on Internal Revenue Service (IRS) Form 1040.
This report presents 2001 earnings and employment data for persons covered under Social Security and Medicare in the 50 states, the District of Columbia, and Puerto Rico. It shows members of the armed forces and reserves according to the residence listed on their
The report uses a residence-based geographic coding system. State and county designations are based on employee residence shown on the
For employers who file on paper, the location of employment is used to represent the worker's residence because of the relatively high cost to SSA of obtaining the worker's residence from those reports. Based on comparisons of residence codes for all workers who have both a wage and salary job and self-employment, about 96 percent have the same state code for their wage and salary job as they do on their Schedule SE. Where a county code is not available, the residence is shown as "Unknown" within the state.
The tables show workers with earnings reported in more than one state or county during the year in one location, mainly their end-of-year residence. The logic sequence for coding a workers' residence begins with the address reported on the Schedule SE. If the worker files no Schedule SE, the address from the magnetic media or electronic report showing the highest taxable wages paid under Medicare is used. If there are only paper reports, the employer address from the report showing the highest taxable wages paid under Medicare is used. Workers with earnings reported in both wage and salary jobs and self-employment are counted in each type of employment, but only once in the total.
Data in this report were obtained from the 1 percent Continuous Work History Sample (CWHS), derived from
Since this report is based on a 1 percent sample, the data are subject to sampling variability. Each number is actually an estimate of the true value in the overall population. A result of sampling is that the numbers have a level of uncertainty, and this uncertainty increases as the numbers get smaller. Therefore, the user should view numbers shown here, particularly the relatively smaller ones, with that result in mind. Sampling variability is described in the appendix at the end of the report. To protect the privacy of workers, table cells with fewer than 3 sample cases at the state level and 10 sample cases at the county level are not shown.
SSA collects race and ethnic data from Form
All tables show the number of persons with taxable earnings under the Social Security and Medicare programs, the amount taxable, and the amount paid (FICA and SECA taxes).
The data for the OASDI program (Tables
The data for the HI program (Tables