The statement is True that taxes deducted from an employee's earnings to finance social security and medicare benefits are called fica taxes.
The full form of FICA is Federal Insurance Contributions Act. FICA tax is considered as the money that is taken out of workers' paychecks to pay older Americans their Social Security retirement and Medicare that is Hospital Insurance benefits. It is a necessary payroll deduction.
All employers are required to deduct social security and medicare taxes from their employees' paychecks.
Moreover, the deducted amounts are remitted to the government through the social security administration authority.
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