under the federal insurance contributions act, which of the following describes where the funds for social security and medicare come from
earnings form investments in employee benefit plans
taxes paid by employers and employees
taxes paid by employees not employers
taxes paid by employers not employees
Under the Federal Insurance Contributions Act (FICA), the funds for Social Security and Medicare come from taxes paid by employers and employees.
Under the Federal Insurance Contributions Act (FICA), the funds for Social Security and Medicare come from taxes paid by employers and employees. Both employers and employees contribute a portion of their wages or salary to fund these programs. The specific amounts and rates are set by the government and may vary over time.
Under the Federal Insurance Contributions Act (FICA), the funds for Social Security and Medicare come from taxes paid by employers and employees.
To determine the correct answer, we can break down the options and eliminate any incorrect choices. Let's go through each option one by one:
1. Earnings from investments in employee benefit plans: This option describes earnings generated from investing in employee benefit plans. While investments may contribute to the overall funding of employee benefit plans, they are not directly related to funding Social Security and Medicare.
2. Taxes paid by employers and employees: This option correctly describes the source of funds for Social Security and Medicare. According to FICA, both employers and employees are required to pay payroll taxes to fund these programs.
3. Taxes paid by employees, not employers: This option is not accurate because employers also contribute to the funding of Social Security and Medicare. The burden is shared between employers and employees through payroll taxes.
4. Taxes paid by employers, not employees: This option is not accurate because employees also contribute to the funding of Social Security and Medicare. The burden is shared between employers and employees through payroll taxes.
Therefore, the correct answer is "taxes paid by employers and employees," as both parties contribute to the funding of Social Security and Medicare.