social security tax addback for high income earners

Does anyone know how the social security tax addback for high income earners works? As you know, for Jan and Feb everyone only withholds 4.2% social security tax. But if you make a lot you have to pay back
the 2%, or maybe even more, later.
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Most folks assume it will never actually go through, but with this Congress, who knows?
The social security FICA limitation assumes that any FICA tax at 4.2 applies only to the first 106,800 annual limit /12 months x 2 months of FICA income, and any additional FICA income that received the 4.2 rate becomes an income tax surcharge. (I assumed that 106800 is the maximum FICA wages subject to FICA tax.)
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ArtKamlet at a o l dot c o m Columbus OH K2PZH

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On Jan 24, 4:04 pm, snipped-for-privacy@panix.com (Arthur Kamlet) wrote:

Actually the limit in 2012 is 110,100 http://www.ssa.gov/pressoffice/pr/2012cola-pr.html .
Is the cap on the extra 2%. Say someone makes $40,000 a month. 110,100/12‘75, so they pay just 4.2% on this 9175, which is 385.35. Then do they pay 2% on the full amount above 9175? If yes, this means 2% of (40000-9175) = 616.5. Total is 1001.85. Whereas 6.2% of 9175 is just 568.85 -- if the payroll tax cut just expired the super-rich would pay just 568.85 a month, but because of this 2% on all of their income, they're actually paying more. Does the law mandate no cap on this surcharge?
Also, assuming the payroll tax cut does not get extended, it would make sense to not sell any non qualified stock options in Jan and Feb as these are considered W-2 income.
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On Jan 25, 1:26 pm, " snipped-for-privacy@yahoo.com" <removeps-

snip
Change "sell" in the statement above to "exercise." It's the exercise of the NQSO that generates W-2 income, not the sale of the stock.
Katie in San Diego
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On 1/24/12 12:54 PM, snipped-for-privacy@yahoo.com wrote:

The wage base in 2012 is $110,100. Two months would equal $18,350. In order to prevent a taxpayer from getting a benefit in excess of 2% of $18350 for that period, the law created a 2% tax for amounts over $18,350. The law instructed the Treasury Secretary to issue guidance on how to carry out that tax. I have not seen the guidance.
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Alan
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