State and Federal Compensation Issues
This guide has been updated for the OBBBA
There are numerous state and federal compensation issues that can impact taxes. This guide explains numerous problems you may run into and how to handle them in keeping with IRS regulations.
Overview
• Maximum FICA Wage 2025: $176,100
• FICA Tax Rate: 6.2%
• Maximum FICA Tax 2025: $10,918.20
• Medicare (HI) Rate: 1.45% - No cap
• Additional HI Tax High Income Taxpayers: 0.9%
• Overtime Deduction (OBBBA): See inside this guide
• Monthly Parking Exclusion 2025: $325
• Monthly Transit Pass 2025: $325
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Monthly Vanpooling Exclusion 2025: $325
• CA SDI Rate 2025: 1.2%
• CA SDI Max Wage 2025: Unlimited
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CA SDI Max Tax 2025: Unlimited
Related IRS Publications and Forms
• Form W-2 – Wage and Tax Statement
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Form 8919 – Uncollected Social Security and Medicare Tax on Wages
• Pub 15 – Circular E, Employer’s Tax Guide
• Pub 15-A – Supplemental Employer’s Tax Guide
• Pub 15-B – Employer’s Tax Guide – Fringe Benefits