December 28, 2011
Temporary Payroll Tax Cut Continuation Act of 2011
On December 23, 2011, President Obama signed into law HR 3765, the Temporary Payroll Tax Cut Continuation Act of 2011, extending the current 4.2% Social Security Old-Age, Survivors, and Disability Insurance (OASDI) tax rate for employees to wages paid between January 1, 2012 and February 29, 2012. Please be aware of the following:
- Effective immediately, any payrolls processed with a check date between January 1, 2012 and February 29, 2012 will reflect the employee Social Security rate of 4.2% with a wage limit of $110,100.00.
- For 2012 payrolls processed prior to December 27, 2011, Social Security tax was withheld from your employees at the rate of 6.2%. Your employees will automatically receive a credit for any overpayment of Social Security tax with their first 2012 pay check processed on or after December 27, 2011.
The reduced tax rate may be extended through 2012. Congress and the White House intend to pursue further legislation to extend the reduced 4.2% OASDI tax rate through 2012. Employers will continue to pay Social Security tax of 6.2% up to the taxable wage limit for each worker ($110,100 for 2012), as well as the 1.45% Medicare tax, with no limit.
TrackBack URL for this entry:
Listed below are links to weblogs that reference Temporary Payroll Tax Cut Continuation Act of 2011: