1. Short title
This Act may be cited as the “Save Social Security Act of 2019”.
Save Social Security Act of 2019
A BILL
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.
2. Determination of wages and self-employment income above contribution and benefit base after 2019
Determination of wages above contribution and benefit base after 2019—
Amendments to the Internal Revenue Code—
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 $300,000, 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 $300,000.”.
Conforming amendment— Section 3121(a)(1) of such Code is amended by striking “Act) to” and inserting “Act), or in excess of $300,000, to”.
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 $300,000, and, for such calendar years, only to the extent remuneration paid to such employee by such employer with respect to employment does not exceed $300,000”.
Effective date— The amendments made by this subsection shall apply with respect to remuneration paid in calendar years after 2019.
Determination of self-Employment income above contribution and benefit base after 2019—
Amendments to the Internal Revenue Code—
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 $300,000 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 $300,000 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 $300,000 over such contribution and benefit base.”
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 $300,000.”.
Amendments to the Social Security Act—
in subparagraph (I)—
by inserting “and before 2020” after “1974”; and
by striking “or” at the end; and
by adding at the end the following:
“(J) For any taxable year beginning in any calendar year after 2019, 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 $300,000 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 $300,000 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 $300,000 over such contribution and benefit base.”
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 $300,000.”.
Effective date— The amendments made by this subsection shall apply to net earnings from self-employment derived, and remuneration paid, in calendar years after 2019.
3. Inclusion of earnings over $300,000 in social security benefit formula
Inclusion of earnings over $300,000 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—
in clause (ii), by striking “and” at the end;
in clause (iii), by inserting “and” at the end; and
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)).”
Definition of excess average indexed monthly earnings— Section 215(b) of the Social Security Act (42 U.S.C. 415(b)) is amended—
by striking “wages” and “self-employment income” each place such terms appear and inserting “basic wages” and “basic self-employment income”, respectively; and
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 2019 in excess of the higher of $300,000 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 2019 in excess of the higher of $300,000 or such contribution and benefit base.”
Conforming amendment— Section 215(e)(1) of the Social Security Act (42 U.S.C. 415(e)(1)) is amended by inserting “and before 2020” after “1974”.
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 2019.
4. Modification of amount of social security benefits included in gross income
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.”
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).
Effective date— The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.