Based on the latest news, the Social Security Administration has once again announced major changes for 2025. According to the federal agency, they will implement significant reforms in early 2025 to help beneficiaries cope with growing inflation and provide competitive salaries. One of the major changes that will happen once 2025 begins is the increase in the taxable maximum, which is currently $168,600 annually but will be increased to help taxpayers. The monthly income an employee earns is called the taxable maximum. All income below this limit will not be taxed in 2025. This is the annual income limit to which payroll tax applies.

The new social security change will affect retirees in 2025

As Social Security has stated, the annual taxable maximum will be $176,100 starting January 1, 2025. Anything received above this threshold must be recorded and only income up to this amount will be paid out. The SSA also emphasized that they are increasing this amount every year to keep pace with the increase in average wages. The Medicare tax has no upper limit on income, so you must pay Medicare tax on all your income. In addition, Social Security will make significant adjustments in the coming year, including an increase in… Cost of Living Adjustment (COLA) up to 2.5% for all recipients under the Administration. Given this annual increase, here are all new payment amounts available for retirees, survivors, disabled people, and recipients of the Supplemental Security Income (SSI) program.

It is important to note that these new benefit amounts will only take effect from January 2025. This means that beneficiaries from the pension, survivor and disability insurance (RSDI) program will receive their enhanced Social Security check until January 3 if they filed for benefits before May 1997, and on January 8 if they filed for benefits after that date and were born between the 1st and the 10th of a given month. To get a general idea of ​​the upcoming payment amounts in January, please refer to the following information:

As you can see, January produces four payments for RSDI beneficiaries and an additional payment for SSI recipients. However, SSI recipients will not receive their regular payment on January 1 because it falls on a holiday. For this reason, recipients of the Supplemental Security Income (SSI) program will be the only recipients to receive their boost payments this year, on December 31. Because the payment schedule can be difficult to understand, keep in mind that you can always access your My Social Security account, where you can download financial statements and even request additional Social Security information.

Other Social Security changes that beneficiaries should be aware of

1. A new rule expands the definition of a household on public assistance to include SNAP benefits, which affects benefits for SSI applicants living in these households since assistance from other household members can be counted as income.
2. Food donations are no longer considered unearned income. Beginning in September, food gifts will no longer be included in the in-kind support and maintenance (ISM) category analysis for SSI recipients. Instead, only affordable or free housing will be allowed. This change will benefit the 9% of SSI beneficiaries whose payments have been reduced due to food gifts by ensuring that their payments do not vary due to food gifts.