We have reported in previous blog posts that the Social Security cost-of-living adjustment in 2020 will be 1.6 percent. Everyone receiving Social Security retirement, disability or survivor’s benefits will see this increase in their benefits in 2020, as will people who receive Supplemental Security Income (SSI) benefits, but there are other changes also coming in 2020. Below we take a look at some other changes in 2020 and how some things will stay the same.
Tax Rate
Nothing will change with how employees are taxed for Social Security benefits. The 7.65 percent rate from 2019 will remain the same in 2020. The 7.65 percent rate is the combined amount for Social Security and Medicare, of which 6.20 percent goes to Social Security. Additionally, people who were self-employed will be taxed at a rate of 15.30 percent, same as in 2019
Quarter Coverage
In 2019 a worker had to earn $1,360 in work-related income each quarter (three-month period) to earn a credit for Social Security retirement and disability benefit purposes. In 2020 they will have to earn a bit more as the rate will increase to $1,410.
SGA
Substantial gainful activity is a term Social Security uses to describe a limit of how much a worker can earn from work-related activities and still meet the technical rules for Social Security Disability Insurance (SSDI). Anyone who earns above SGA amounts is not entitled to SSDI benefits regardless of any disabilities. The 2019 SGA amount is $1,220 and that will increase to $1,260 in 2020. The SGA limit for people who are blind is a bit different as they are allowed earn more work-related income before they reach SGA. In 2019 SGA is $2,040 and that will increase to $2,110 in 2020.
There are other minor changes to certain programs, but the SSI resource limit will stay the same. The SSI resource limit, $2,000 for an individual and $3,000 for a couple, limits assets and income before a person can be eligible for the needs-based SSI program.
