Determination of taxable wages and self-employment income above contribution and benefit base after 2025

(a) Determination of taxable wages above contribution and benefit base after 2025 (1) Amendments to the Internal Revenue Code of 1986 Section 3121 of the Internal Revenue Code of 1986 is amended— (A) in subsection (a)(1), by inserting the applicable percentage (determined under subsection (c)(1)) of before that part of the remuneration; and (B) in subsection (c), by striking (c) Included and excluded service.—For purposes of this chapter, if and inserting the following: (c) Special rules for wages and employment (1) Applicable percentage of remuneration in determining taxable wages For purposes of subsection (a)(1), the applicable percentage for a calendar year shall be determined in accordance with the following table: The applicable In the case of: percentage is: Calendar year 2026 90 percent Calendar year 2027 80 percent Calendar year 2028 70 percent Calendar year 2029 60 percent Calendar year 2030 50 percent Calendar year 2031 40 percent Calendar year 2032 30 percent Calendar year 2033 20 percent Calendar year 2034 10 percent Calendar years after 2035 0 percent. (2) Included and excluded service For purposes of this chapter, if. (2) Amendments to the Social Security Act Section 209 of the Social Security Act (42 U.S.C. 409) is amended— (A) in subsection (a)(1)(I)— (i) by inserting and before 2026 after 1974; and (ii) by inserting and after the semicolon; (B) in subsection (a)(1), by adding at the end the following new subparagraph: (J) The applicable percentage (determined under subsection (l)) of that part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to the contribution and benefit base (determined under section 230) with respect to employment has been paid to an individual during any calendar year after 2025 with respect to which such contribution and benefit base is effective, is paid to such individual during such calendar year;; and (C) by adding at the end the following new subsection: (l) For purposes of subsection (a)(1)(J), the applicable percentage for a calendar year shall be determined in accordance with the following table: The applicable In the case of: percentage is: Calendar year 2025 90 percent Calendar year 2027 80 percent Calendar year 2028 70 percent Calendar year 2029 60 percent Calendar year 2030 50 percent Calendar year 2031 40 percent Calendar year 2032 30 percent Calendar year 2033 20 percent Calendar year 2034 10 percent Calendar years after 2035 0 percent.. (3) Effective date The amendments made by this subsection shall apply with respect to remuneration paid in calendar years after 2025. (b) Determination of taxable self-Employment income above contribution and benefit base after 2025 (1) Amendments to the Internal Revenue Code of 1986 Section 1402 of the Internal Revenue Code of 1986 is amended— (A) in subsection (b)(1), by striking that part of the net earnings and all that follows through minus and inserting the following: an amount equal to the applicable percentage (as determined under subsection (d)(2)) of that part of the net earnings from self-employment which is in excess of the difference (not to be less than zero) between (i) an amount equal to 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, and; and (B) in subsection (d)— (i) by striking (d) Employee and wages.—The term and inserting the following: (d) Rules and definitions (1) Employee and wages The term; and (ii) by adding at the end the following: (2) Applicable percentage of net earnings from self-employment in determining taxable self-employment income For purposes of subsection (b)(1), the applicable percentage for a taxable year beginning in any calendar year referred to in such paragraph shall be determined in accordance with the following table: The applicable In the case of: percentage is: Calendar year 2026 90 percent Calendar year 2027 80 percent Calendar year 2028 70 percent Calendar year 2029 60 percent Calendar year 2030 50 percent Calendar year 2031 40 percent Calendar year 2032 30 percent Calendar year 2033 20 percent Calendar year 2034 10 percent Calendar years after 2035 0 percent.. (2) Amendments to the Social Security Act Section 211 of the Social Security Act (42 U.S.C. 411) is amended— (A) in subsection (b)— (i) in paragraph (1)(I)— (I) by striking or after the semicolon; and (II) by inserting and before 2026 after 1974; (ii) by redesignating paragraph (2) as paragraph (3); and (iii) by inserting after paragraph (1) the following: (2) For any taxable year beginning in any calendar year after 2025, an amount equal to the applicable percentage (as determined under subsection (l)) of that part of net earnings from self-employment which is in excess of the difference (not to be less than zero) between— (A) an amount equal to the contribution and benefit base (as determined under section 230) that is effective for such calendar year, and (B) the amount of the wages paid to such individual during such taxable year; or; and (B) by adding at the end the following: (l) For purposes of subsection (b)(2), the applicable percentage for a taxable year beginning in any calendar year referred to in such paragraph shall be determined in accordance with the following table: The applicable In the case of: percentage is: Calendar year 2026 90 percent Calendar year 2027 80 percent Calendar year 2028 70 percent Calendar year 2029 60 percent Calendar year 2030 50 percent Calendar year 2031 40 percent Calendar year 2032 30 percent Calendar year 2033 20 percent Calendar year 2034 10 percent Calendar years after 2035 0 percent.. (3) Effective date The amendments made by this subsection shall apply with respect to taxable years beginning in calendar years after 2025. (c) Computing average indexed monthly earnings Section 215(e) of the Social Security Act (42 U.S.C. 415(e)) is amended— (1) in paragraph (1)— (A) by striking and after before 1975,; (B) by inserting and before 2026 after after 1974; and (C) by inserting, and the applicable percentage of the excess over an amount equal to the contribution and benefit base (as determined under section 230) in the case of any calendar year after 2025 with respect to which such contribution and benefit base is effective, after benefit base is effective,; and (2) by adding at the end the following: (3) For purposes of paragraph (1), the applicable percentage for a year shall be determined in accordance with the following table: The applicable In the case of: percentage is: Calendar year 2026 90 percent Calendar year 2027 80 percent Calendar year 2028 70 percent Calendar year 2029 60 percent Calendar year 2030 50 percent Calendar year 2031 40 percent Calendar year 2032 30 percent Calendar year 2033 20 percent Calendar year 2034 10 percent Calendar years after 2035 0 percent.. (d) Conforming amendment Section 215(i)(2)(C)(i) of the Social Security Act (42 U.S.C. 415(i)(2)(C)(i)) is amended by striking the Commissioner's estimate of the extent to which the cost of such increase would be met by an increase in the contribution and benefit base under section 230 and the estimated amount of the increase in such base,.