Which of the following statements is true?
A. FICA withholding goes to pay federal and state income taxes.
B. FICA withholding goes only to pay social security.
C. FICA withholding goes only to pay Medicare.
D. FICA withholding goes to pay social security and Medicare.
D. FICA withholding goes to pay social security and Medicare.
What is the role of Medicare today?
The role of Medicare today is to provide health insurance for individuals who are 65 years old or older, as well as certain individuals with disabilities or end-stage renal disease. Medicare helps cover the costs of various medical services, including hospital stays, doctor visits, prescription drugs, and preventive care. It is a federally administered program that aims to ensure access to affordable healthcare for eligible individuals.
The true statement is D. FICA withholding goes to pay social security and Medicare.
To determine which statement is true regarding FICA withholding, we need to understand what FICA withholding is and where it goes.
FICA stands for the Federal Insurance Contributions Act and is a law that requires employers to withhold certain taxes from their employees' paychecks. These withheld amounts are then used to fund Social Security and Medicare programs.
Now, let's evaluate each statement:
A. FICA withholding goes to pay federal and state income taxes.
This statement is not true. FICA withholding specifically goes toward Social Security and Medicare, not federal and state income taxes.
B. FICA withholding goes only to pay social security.
This statement is not true either. While a portion of the FICA withholding goes toward funding the Social Security program, it is not the only destination for these funds.
C. FICA withholding goes only to pay Medicare.
This statement is also not true. While another portion of the FICA withholding goes toward funding the Medicare program, it is not the sole purpose of these withholdings.
D. FICA withholding goes to pay social security and Medicare.
This statement is true. FICA withholdings go toward funding both the Social Security and Medicare programs.
Therefore, the correct answer is D. FICA withholding goes to pay social security and Medicare.