In October of each year, the Social Security Administration announces adjustments that take effect the following January that are based on the increase in average wages. Based on the wage data Social Security had at the time of the October 13, 2017 announcement, the maximum amount of earnings subject to the Social Security tax (taxable maximum) was to increase to $128,700 in 2018, from $127,200 in 2017. The new amount for 2018, based on updated wage data reported to Social Security, is $128,400.
This lower taxable maximum amount is due to corrected W-2s provided to Social Security in late October 2017 by a national payroll service provider. Approximately 500,000 corrections for W-2s from 2016 were filed, resulting in the change.