Repeal of limitation on social security wage base for FICA and SECA after 2026

(a) Repeal of limitation on social security wage base for FICA (1) Amendments to the Internal Revenue Code of 1986 (A) Repeal of present law limitation Section 3121(a) of the Internal Revenue Code of 1986 is amended by striking paragraph (1). (B) Application to railroad retirement Section 3231(e)(2)(A)(i) of such Code is amended by striking The term and inserting Except in the case of so much of the taxes imposed by sections 3201(a), 3211(a), and 3221(a) as are determined by reference to the rate in effect under section 3101(a) or 3111(a), the term. (C) Conforming amendments (i) Section 51(h)(1)(A) of such Code is amended by inserting (determined as if section 3121(a)(1) had not been repealed by the Social Security 2100 Act) after contribution and benefit base. (ii) Section 3121(s) of such Code is amended by striking 3102, 3111, and 3121(a)(1) and inserting 3102 and 3111. (iii) Section 3122 of such Code is amended by striking The person making such return may, for convenience of administration, make payments of the tax imposed under section 3111 with respect to such service without regard to the contribution and benefit base limitation in section 3121(a)(1), and he shall not be required to obtain a refund of the tax paid under section 3111 on that part of the remuneration not included in wages by reason of section 3121(a)(1).. (iv) Subsections (a), (b), (c), and (d) of section 3125 of such Code are each amended by striking the last sentence. (v) Section 3231(e)(2)(C) of such Code is amended by inserting (as in effect on the date of the enactment of the Social Security 2100 Act after employers). (vi) Section 3511(b) of such Code is amended by striking 3121(a)(1), 3231(e)(2)(C), and inserting 3231(e)(2)(C). (vii) Section 6413(c) of the Internal Revenue Code of 1986 is amended— (I) by striking paragraph (1), and (II) in paragraph (2)(A) by striking, not to exceed an amount equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) for any calendar year with respect to which such contribution and benefit base is effective,. (2) Amendment to the Social Security Act with respect to the contribution and benefit base (A) Wages Section 209(a)(1) of the Social Security Act (42 U.S.C. 409(a)(1)) is amended in subparagraph (I), by striking after 1974 and inserting after 1974 and prior to 2027. (B) Self-employment income Section 211(b)(1)(I) of the Social Security Act (42 U.S.C. 411(b)(1)(I)) is amended by striking For any taxable year beginning in any calendar year after 1974 and inserting For any taxable year beginning after 1974 and prior to 2026. (b) Repeal of limitation on social security wage base for SECA after 2026 (1) Amendments to Internal Revenue Code of 1986 (A) In general Section 1402(b) of the Internal Revenue Code of 1986 is amended by striking not include— and all that follows through 3211. and inserting not include the net earnings from self-employment, if such net earnings for the taxable year are less than $400.. (B) Conforming amendments (i) The last sentence of section 1402(b) of such Code is amended by striking paragraph (2) and inserting this subsection. (ii) Section 1402(j)(2)(A) of such Code is amended by striking all that precedes shall be applied and inserting: (A) Separate application of de minimis rule Subsection (b). (iii) Section 1402(j)(2)(B) of such Code is amended by striking paragraph (2) of subsection (b) and inserting subsection (b). (2) Amendment to the Social Security Act (A) In general Section 211(b) of the Social Security Act (42 U.S.C. 411(b)), as amended by subsection (a)(2), is amended to read as follows: (b) Self-Employment income (1) In general Subject to paragraph (2), the term self-employment income means the net earnings from self-employment derived by an individual, except that such term shall not include net earnings from self-employment if such net earnings for the taxable year are less than $400. (2) Definition and special rules (A) Nonresident aliens A nonresident alien individual shall not be treated as an individual for purposes of paragraph (1), except as provided by an agreement under section 233. An individual who is not a citizen of the United States but who is a resident of the Commonwealth of Puerto Rico, the Virgin Islands, Guam, or American Samoa shall not, for purposes of this subsection, be considered to be a nonresident alien individual. (B) Church employee In the case of church employee income, the special rules of subsection (i)(2) shall apply for purposes of paragraph (1).. (B) Conforming amendment Section 211(i)(2) of the Social Security Act (42 U.S.C. 411(i)(2)) is amended by striking (b)(2) and inserting (b)(1) each place it appears. (c) Conforming change to national average wage index Section 209(k) of the Social Security Act (42 U.S.C. 409(k)) is amended— (1) in paragraph (1), by inserting and to paragraph (4) after paragraph (2); and (2) by adding at the end the following: (4) For each calendar year after 2026, the national average wage index as defined in this section for such calendar year shall be deemed to be the national average wage index determined under the preceding paragraphs of this section increased by the following percentage: (A) For calendar years 2027 through 2032, 0.5 percent. (B) For calendar years 2033 through 2038, 0.6 percent. (C) For calendar years 2039 through 2044, 0.7 percent. (D) For calendar years 2045 through 2048, 0.8 percent. (E) For calendar years after 2048, 0.9 percent.. (d) Effective dates (1) In general The amendments made by subsection (a) shall apply to remuneration paid in calendar years after 2026. (2) Self-employment income The amendments made by subsection (b) shall apply to net earnings from self-employment derived in taxable years beginning after December 31, 2026.