Office of the Chief Actuary 

Social Security AdministraƟon 

 Based on the 2023 Trustees Report Intermediate AssumpƟons 

These provisions expand or reduce the categories of workers or the amount of earnings 

covered under the Social Security system, or add other sources of revenue that would 

be dedicated to OASDI. For each provision, we provide an esƟmate of the financial 

effect on the OASDI program over the long-range period (the next 75 years) and the 

75th year. We base all esƟmates on the intermediate assumpƟons described in the 

2023 Trustees Report. 

Provisions AffecƟng Coverage of Employment or F Earnings, or Inclusion of Other Sources of Revenue 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

F1 0.14 -0.16 4% -4%

F2 -0.79 -1.00 -22% -23%

F3 1.13 0.77 31% 18%

F4 0.33 0.22 9% 5%

F6 0.67 0.80 19% 18%

F7 0.61 0.77 17% 18%

F8 0.93 1.01 26% 23%

F9 1.31 1.57 36% 36%

F10 1.79 2.22 50% 51%

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Starting in 2024, cover newly hired State and local government 

employees.

Starting in 2024, exempt individuals with more than 180 quarters of 

coverage from the OASDI payroll tax. Earnings exempted from OASDI 

payroll tax would not be used in computing benefits.

Expand covered earnings to include employer and employee premiums 

for employer-sponsored group health insurance (ESI). Starting in 2027, 

phase out the OASDI payroll tax exclusion for ESI premiums. Set an 

exclusion level at the 75th percentile of premium distribution in 2027, 

with amounts above that subject to the payroll tax. Reduce the exclusion 

level each year by 10 percent of the 2027 exclusion level until fully 

Expand covered earnings to include contributions to voluntary salary 

reduction plans (such as Cafeteria 125 plans and Flexible Spending 

Accounts). Starting in 2024, subject these contributions to the OASDI 

payroll tax, making the payroll tax treatment of these contributions like 

401(k) contributions.

Apply a separate 6.2 percent tax on investment income as defined in the 

Affordable Care Act (ACA), with unindexed thresholds as in the ACA 

($200,000 for single filer, $250,000 for married filing jointly), starting in 

2025. Proceeds go to the OASI and DI Trust Funds.

Category F: Coverage of Employment or Earnings, or Inclusion of Other Sources of Revenue 

(2023 Trustees Report intermediate assumptions)

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

For the estate tax, gift tax, and generation skipping transfer (GST) tax, 

return the respective exemption thresholds and tax rates to 2009 levels 

($3.5 million threshold for estate tax with a top 45% tax rate) for deaths 

after 2023 and gifts made after 2023, with those levels not indexed in 

future years. All proceeds from the estate tax, gift tax, and GST tax would 

go to the OASI and DI Trust Funds.

For active S-corporation officers and limited partners, apply a 16.2 

percent tax on investment income as defined in the ACA, with unindexed 

thresholds as in the ACA ($200,000 single filer, $250,000 for married filing 

joint), starting in 2024. Proceeds go to the OASDI Trust Funds for tax 

attributable to 12.4 percent of the total 16.2 percent tax rate.

Apply a separate 12.4 percent tax on investment income as defined in the 

Affordable Care Act (ACA), with unindexed thresholds as in the ACA 

($200,000 single filer, $250,000 for married filing joint), starting in 2025. 

Proceeds go to the OASDI Trust Funds.

Expand the tax on net investment income (NII) as defined in the 

Affordable Care Act (ACA) to cover earnings from active S corporation 

holders and active limited partners. Apply a 12.4-percent tax on this 

expanded definition of NII, payable to the OASI and DI Trust Funds with 

specified thresholds, effective for 2024 and later. The unindexed 

thresholds for this provision are $400,000 for a single filer and $500,000 

for a married couple filing jointly. The NII tax would apply to the lesser of 

NII and the excess of modified adjusted income (MAGI) above the 

unindexed thresholds.

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

F11 Apply a separate 12.4-percent tax on net investment income (NII), as 1.20 1.53 33% 35%

defined in the Affordable Care Act (ACA), payable to the OASI and DI Trust 

Funds with an unindexed threshold of $400,000, effective 2025 and later. 

The NII tax would apply to the lesser of NII and the excess of modified 

adjusted income (MAGI) above the unindexed threshold of $400,000. This 

single threshold would apply regardless of tax filing status.

Category F: Coverage of Employment or Earnings, or Inclusion of Other Sources of Revenue (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions