For which of the following taxes is there a ceiling on the amount of annual earnings subject to the tax?
A) FICA
B) Medicare
C) Federal income tax
D) State income tax

Question

Quizplus · Accepted Answer

The Federal Insurance Contributions Act (FICA) tax, which funds Social Security and Medicare, has a wage ceiling above which no tax is levied. As of 2021, the taxable wage base is $142,800. Therefore, earnings above this limit do not contribute to Social Security or Medicare taxes. The other taxes listed do not have such a ceiling on earnings subject to tax.

For Which of the Following Taxes Is There a Ceiling