All earnings are typically subject to Medicare tax, while Social Security earnings:

Question

Quizplus · Accepted Answer

Social Security earnings are subject to a cap, which in 2021 is $110,100 per year. However, there is no cap on Medicare taxes, meaning all earnings are subject to Medicare tax. Option A is incorrect because it refers to the Federal Unemployment Tax Act (FUTA), not Social Security or Medicare taxes. Option B is incorrect because there is no cap of $100,000 per quarter on Social Security earnings. Option D is also incorrect because withholding allowances relate to income tax withholding, not Social Security or Medicare taxes.

All Earnings Are Typically Subject to Medicare Tax, While Social