social security tax addback for high income earners

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.)

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.

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