Save Social Security Act of 2021
Bill: H.R.2304 | Sponsor: Rep. Crist, Charlie (D-FL)
Policy area: Health

Summary:
Save Social Security Act of 2021
This bill modifies the requirements for Social Security payroll taxes and benefits to
(Under current law, Social Security payroll taxes apply to the first $142,800 of income in 2021 and a portion of benefits is included in the gross income of individuals with certain income that exceeds specified thresholds, depending on the individual's filing status.)

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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Save Social Security Act of 2021''.

SEC. 2. DETERMINATION OF WAGES AND SELF-EMPLOYMENT INCOME ABOVE 
              CONTRIBUTION AND BENEFIT BASE AFTER 2021.

    (a) Determination of Wages Above Contribution and Benefit Base 
After 2021.--
            (1) Amendments to the internal revenue code.--
                    (A) In general.--Section 3121(a)(1) of the Internal 
                Revenue Code of 1986 is amended by inserting after 
                ``such calendar year.'' the following: ``The preceding 
                sentence shall apply only to calendar years for which 
                the contribution and benefit base (as so determined) is 
                less than $400,000, 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 $400,000.''.
                    (B) Conforming amendment.--Section 3121(a)(1) of 
                such Code is amended by striking ``Act) to'' and 
                inserting ``Act), or in excess of $400,000, 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)) is amended by inserting before the semicolon at 
        the end the following: ``except that this subparagraph shall 
        apply only to calendar years for which the contribution and 
        benefit base (as so determined) is less than $400,000, and, for 
        such calendar years, only to the extent remuneration paid to 
        such employee by such employer with respect to employment does 
        not exceed $400,000''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply with respect to remuneration paid in calendar years 
        after 2021.
    (b) Determination of Self-Employment Income Above Contribution and 
Benefit Base After 2021.--
            (1) Amendments to the internal revenue code.--
                    (A) In general.--Section 1402(b)(1) of the Internal 
                Revenue Code of 1986 is amended to read as follows:
            ``(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 $400,000 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 $400,000 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 $400,000 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 $400,000.''.
            (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)) is amended--
                            (i) in subparagraph (I)--
                                    (I) by inserting ``and before 
                                2022'' after ``1974''; and
                                    (II) by striking ``or'' at the end; 
                                and
                            (ii) by adding at the end the following:
                    ``(J) For any taxable year beginning in any 
                calendar year after 2021, 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 $400,000 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 $400,000 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 $400,000 over 
                                such contribution and benefit base.''.
                    (B) Phaseout.--Section 211(b) of the Social 
                Security Act (42 U.S.C. 411(b)) 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) is less than $400,000.''.
            (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 2021.

SEC. 3. INCLUSION OF EARNINGS OVER $400,000 IN SOCIAL SECURITY BENEFIT 
              FORMULA.

    (a) Inclusion of Earnings Over $400,000 in Determination of Primary 
Insurance Amounts.--Section 215(a)(1)(A) of the Social Security Act (42 
U.S.C. 415(a)(1)(A)) is amended--
            (1) in clause (ii), by striking ``and'' at the end;
            (2) in clause (iii), by inserting ``and'' at the end; 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)) is amended--
            (1) by striking ``wages'' and ``self-employment income'' 
        each place such terms appear and inserting ``basic wages'' and 
        ``basic self-employment income'', respectively; and
            (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' for `basic wages' and `excess self-
employment income' for `basic self-employment income' each place such 
terms appear in this subsection (except in this paragraph).
    ``(B) For purposes of this subsection--
            ``(i) the term `basic wages' means that portion of the 
        wages of an individual paid in a year that does not exceed the 
        contribution and benefit base for the year;
            ``(ii) the term `basic self-employment income' means that 
        portion of the self-employment income of an individual credited 
        to a year that does not exceed an amount equal to the 
        contribution and benefit base for the year minus the amount of 
        the wages paid to the individual in the year;
            ``(iii) the term `excess wages' means that portion of the 
        wages of an individual paid in a year after 2021 in excess of 
        the higher of $400,000 or the contribution and benefit base for 
        the year; and
            ``(iv) the term `excess self-employment income' means that 
        portion of the self-employment income of an individual credited 
        to a year after 2021 in excess of the higher of $400,000 or 
        such contribution and benefit base.''.
    (c) Conforming Amendment.--Section 215(e)(1) of the Social Security 
Act (42 U.S.C. 415(e)(1)) is amended by inserting ``and before 2022'' 
after ``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 2021.

SEC. 4. MODIFICATION OF AMOUNT OF SOCIAL SECURITY BENEFITS INCLUDED IN 
              GROSS INCOME.

    (a) In General.--Section 86 of the Internal Revenue Code of 1986 is 
amended by striking subsections (a), (b), and (c) and inserting the 
following:
    ``(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) Applies.--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' means 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.
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