Save Social Security Act of 2019

To amend title II of the Social Security Act and the Internal Revenue Code of 1986 to modify the portion of wages and self-employment income subject to payroll taxes, and for other purposes. 1. Short title This Act may be cited as the Save Social Security Act of 2019 2. Determination of wages and self-employment income above contribution and benefit base after 2019 (a) Determination of wages above contribution and benefit base after 2019 (1) Amendments to the Internal Revenue Code (A) In general Section 3121(a)(1) such calendar year. The preceding sentence shall apply only to calendar years for which the contribution and benefit base (as so determined) is less than $300,000, and, for such calendar years, only to so much of the remuneration paid to such employee by such employer with respect to employment as does not exceed $300,000. (B) Conforming amendment Section 3121(a)(1) of such Code is amended by striking Act) to Act), or in excess of $300,000, to (2) Amendment to the Social Security Act Section 209(a)(1)(I) of the Social Security Act ( 42 U.S.C. 409(a)(1)(I) except that this subparagraph shall apply only to calendar years for which the contribution and benefit base (as so determined) is less than $300,000, and, for such calendar years, only to the extent remuneration paid to such employee by such employer with respect to employment does not exceed $300,000 (3) Effective date The amendments made by this subsection shall apply with respect to remuneration paid in calendar years after 2019. (b) Determination of self-Employment income above contribution and benefit base after 2019 (1) Amendments to the Internal Revenue Code (A) In general Section 1402(b)(1) (1) in the case of the tax imposed by section 1401(a)— (A) in the case of a taxpayer with wages (as determined under section 3121(a) without regard to paragraph (1) of such section) less than $300,000 and more than the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective for the calendar year in which such taxable year begins, the lesser of— (i) the excess of $300,000 over the wages (as so determined) paid to such individual during such taxable year, or (ii) the net earnings from self-employment for the taxable year, and (B) in the case of a taxpayer with wages (as so determined) less than or equal to such contribution and benefit base and for whom the sum, for the taxable year, of net earnings from self-employment and wages (as so determined) paid to such individual is greater than such contribution and benefit base, the lesser of— (i) the excess of such sum over such contribution and benefit base, or (ii) the excess of $300,000 over such contribution and benefit base. . (B) Phaseout Section 1402(b) of such Code is amended by adding at the end the following: Paragraph (1) shall apply only to taxable years beginning in calendar years for which the contribution and benefit base (as determined under section 230 of the Social Security Act) is less than $300,000. (2) Amendments to the Social Security Act (A) In general Section 211(b)(1) of the Social Security Act ( 42 U.S.C. 411(b) (i) in subparagraph (I)— (I) by inserting and before 2020 1974 (II) by striking or (ii) by adding at the end the following: (J) For any taxable year beginning in any calendar year after 2019, an amount equal to— (i) in the case of an individual with wages (as determined under section 209(a) without regard to paragraph (1) of such section) less than $300,000 and more than the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective for the calendar year in which such taxable year begins, the lesser of— (I) the excess of $300,000 over the wages (as so determined) paid to such individual during such taxable year, or (II) the net earnings from self-employment for the taxable year, and (ii) in the case of a taxpayer with wages (as so determined) less than or equal to such contribution and benefit base and for whom the sum, for the taxable year, of net earnings from self-employment and wages (as so determined) paid to such individual is greater than such contribution and benefit base, the lesser of— (I) the excess of such sum over such contribution and benefit base, or (II) the excess of $300,000 over such contribution and benefit base. . (B) Phaseout Section 211(b) of the Social Security Act ( 42 U.S.C. 411(b) Paragraph (1) shall apply only to taxable years beginning in calendar years for which the contribution and benefit base (as determined under section 230) is less than $300,000. (3) Effective date The amendments made by this subsection shall apply to net earnings from self-employment derived, and remuneration paid, in calendar years after 2019. 3. Inclusion of earnings over $300,000 in social security benefit formula (a) Inclusion of earnings over $300,000 in determination of primary insurance amounts Section 215(a)(1)(A) of the Social Security Act ( 42 U.S.C. 415(a)(1)(A) (1) in clause (ii), by striking and (2) in clause (iii), by inserting and (3) by inserting after clause (iii) the following: (iv) 3 percent of the individual’s excess average indexed monthly earnings (as defined in subsection (b)(5)(A)). . (b) Definition of excess average indexed monthly earnings Section 215(b) of the Social Security Act ( 42 U.S.C. 415(b) (1) by striking wages self-employment income basic wages basic self-employment income (2) by adding at the end the following: (5) (A) An individual's excess average indexed monthly earnings shall be equal to the amount of the individual's average indexed monthly earnings that would be determined under this subsection by substituting excess wages basic wages excess self-employment income basic self-employment income (B) For purposes of this subsection— (i) the term basic wages (ii) the term basic self-employment income (iii) the term excess wages (iv) the term excess self-employment income . (c) Conforming amendment Section 215(e)(1) of the Social Security Act ( 42 U.S.C. 415(e)(1) and before 2020 1974 (d) Effective date The amendments made by this section shall apply with respect to individuals who initially become eligible (within the meaning of section 215(a)(3)(B) of the Social Security Act) for old-age or disability insurance benefits under title II of the Social Security Act, or who die (before becoming eligible for such benefits), in any calendar year after 2019. 4. Modification of amount of social security benefits included in gross income (a) In general Section 86 (a) In general Gross income for the taxable year of any taxpayer described in subsection (b) (notwithstanding section 207 of the Social Security Act) includes social security benefits in an amount equal to the lesser of— (1) 85 percent of the social security benefits received during the taxable year, or (2) 85 percent of the excess described in subsection (b). (b) Taxpayers to whom subsection (a) A taxpayer is described in this subsection if— (1) the sum of— (A) the modified adjusted gross income of the taxpayer for the taxable year, plus (B) 85 percent of the social security benefits received during the taxable year, exceeds (2) $100,000. (c) Modified adjusted gross income For purposes of this section, the term modified adjusted gross income (1) determined without regard to this section and sections 135, 137, 199, 221, 222, 911, 931, and 933, and (2) increased by the amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax. . (b) Social security trust funds held harmless There are hereby appropriated (out of any money in the Treasury not otherwise appropriated) for each fiscal year to each fund under the Social Security Act or the Railroad Retirement Act of 1974 an amount equal to the reduction in the transfers to such fund for such fiscal year by reason of the amendments made by subsection (a). (c) Effective date The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

Summary: Save Social Security Act of 2019 This bill modifies the requirements for Social Security payroll taxes and benefits to apply Social Security payroll taxes to annual income above $300,000, include earnings above $300,000 in the benefit formula, and increase to $100,000 the income threshold above which a portion of a taxpayer's Social Security benefits is included in gross income. (Under current law, Social Security payroll taxes apply to the first $132,900 of income in 2019 and a portion of benefits is included in the gross income of individuals with certain income that exceeds thresholds of $0, $25,000, or $32,000, depending on the individual's filing status.)