FICA stands for the Federal Insurance Contributions Act. It is a U.S. federal payroll tax that is used to fund Social Security and Medicare programs. FICA taxes are deducted from an employee's earnings and are also contributed to by employers. The tax is generally taken as a percentage of an employee's gross income, with specific rates set for Social Security and Medicare.
In summary, FICA is primarily a tax that ensures funding for key social welfare programs in the United States.
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