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Tax FAQWhat are Social Security and Medicare taxes?
What are Federal Withholding and State Withholding?
What does "EXEMPT" on the W-4 Form mean?
Are student earnings automatically exempt?
What is a CA SDI tax?
What are Social Security and Medicare taxes?
These are mandatory taxes based on the Federal Insurance Contribution Act (FICA). FICA taxes apply to all employees, except for students enrolled in at least half time status during the Fall and Spring Semesters.
Social Security:
2009 Social Security taxable wage base has been increased to $106,800 from $102,000. Furthermore, employer/employee contribution rates remain unchanged at 6.20%. Thus, the maximum contribution per employee increases to $6,621.60 (6.20%) from $6,324.00 for the calendar year.
Medicare Tax:
The Medicare taxable wage base continues to be unlimited. The employer and employee contribution rates remain unchanged at 1.45% |
What are Federal Withholding and State Withholding?
| These are income taxes withheld in anticipation of your expected liability for the calendar year. The amount withheld is determined by withholding allowances and marital status claimed on your W4 and/or DE-4 and the amount you are paid.
For further details, visit the IRS W4 Allowance Calculator. |
What does "EXEMPT" on the W-4 Form mean?
| On the Federal W4 or California DE-4, claiming "exempt" from withholding means that you expect to have no tax liability on your personal tax return at the end of the current year, you had no tax liability in the last calendar year, and do not wish for income taxes to be withheld. To claim "exempt" from federal withholding, you need to fill out a W-4 form and write the word "EXEMPT" on line 7. If you claim "exempt" on your Federal W4, you may claim "exempt" on the California DE4. |
Are student earnings automatically exempt?
| Student wage earnings are not automatically exempt from all taxes. See the Student FAQ for more information. |
What is CA SDI tax?
CA SDI is a tax that applies to California employees. It is a disability program funded by employee tax contributions and managed by the State of California. SDI purpose is to assist employees on a short time basis who are unable to work due to a non-work injury or illness.
California State Disability Insurance (SDI):
The 2009 California SDI employee tax rate increased to 1.1% from .8%. THe taxable wage base increased from $86,698.00 to $90,669. The maximum contribution is $997.36 per calendar year. |
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