| Description: |
The Federal Insurance Contributions Act tax is a United States payroll (or employment) tax imposed by the federal government on both employees and employers to fund Social Security and Medicare - federal programs that provide benefits for retirees, the disabled, and children of deceased workers. Social Security benefits include old-age, survivors, and disability insurance; Medicare provides hospital insurance benefits. The amount that one pays in payroll taxes throughout one's working career is directly tied to the social security benefits annuity that one receives as a retiree. This has led some to claim that the payroll tax is not a tax because its collection is directly tied to a benefit. |