How are the Social Security taxes governed?

The governance of Social Security taxes is outlined by the Federal Insurance Contributions Act (FICA). This federal law establishes the framework for collecting Social Security and Medicare taxes from both employees and employers. Under FICA, the tax is automatically withheld from employees' paychecks, ensuring a steady flow of funding for these social insurance programs, which provide benefits to retirees, disabled individuals, and survivors of deceased workers.

FICA not only sets the rates at which these taxes are levied but also defines the necessary conditions for wage and salary contributions. This makes it crucial for maintaining the financial stability of the Social Security system. The structure and regulations set forth by FICA are consistent across the entire country, allowing for uniformity in how Social Security taxes are applied and collected, irrespective of state or local laws.