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What is Required of an Employer by the Federal Insurance Contribution Act?

It is known that all the employers in the United States should withhold from their employees’ wages some amount of money in order to pay to a trust fund which is specially designed to provide appropriate benefits including retirement and others. It is also called Social Security. In other words, these payroll taxes which are also called FICA taxes are collected according to the FICA. Moreover, Medicare taxes are included in these FICA taxes. It means that hospital insurance is related to the Medicare tax while Social Security tax finances the Old age, Disability and Survivors Insurance. Speaking about the rate, it is necessary to say that the employee Social Security Old Age, Survivor and Disability Insurance Tax is 6,20%, the employer pays 6,2% too. The employee Medicare tax rate is 1,45, the employer pays 1,45% too. FICA was codifies in 1939, and can be found in the Chapter 21, the Internal Revenue Code.

References
Epstein, B., Nach, R., Bragg, S. (2009) Wiley GAAP 2010: Interpretation of Generally Accepted Accounting Principles. New Jersey: Wiley and Son. Inc.
Chapter 21 – Federal Insurance Contribution Act. Cornell University Law School. Retrieved from:http://www.law.cornell.edu>
FICA Rate for 2011. Hubpages. Retrieved May 23, 2011 from:http://hubpages.com/hub/FICA-Rate>
FICA Tax.Money-Zine.com. Retrieved from:http://www.money-zine.com>
Mannino, L. (2009) Full-time Medical Residents not exempt from FICA. Journal of Accountancy. September 1, 2009. American Institute of CPA’S. Vol.208(3).
Nevius, A. (2009) Correcting FICA Errors. Journal of Accountancy. July 1, 2009. American Institute of CPA’s. Vol. 208(1)
Weinberger, M. (2001) IRS Guidance on Medical Resident FICA Refund Claims. The Tax Adviser. January 1, 2001. American Institute of CPA’s. Vol.32(3).