The Payroll Tax Cut Extension was approved by Congress on February 17, 2012. The effect of this extension is to extend the 4.2% Social Security Old Age Survivors and Disability (OASDI) tax rate through 2012.
Payroll processing should reflect:
Please be aware of the following*:
- As of February 22, 2012, payrolls processing should reflect the employee Social Security rate of 4.2% with a wage limit of $110,100.00.
- Payroll checks dated after March 1, 2012 processed between February 10 and February 22, may have had Social Security withheld at the higher rate of 6.2%. which means that your employees should receive a credit for any overpayment of Social Security tax
- Terminated employee(s) who may have overpayed Social Security tax can be handled by reimbursement, or by instructing the employee to claim the refund when they file their 2012 taxes, using form 843 Claim For Refund and Request For Abatement.
Social security tax for employers continues at 6.2% up to the taxable wage limit of $110,000 for each worker, as well as the 1.45% Medicare tax (no limit).
HR Knowledge will continue to update and monitor changes in employer and payroll tax legislation and will apply these changes on behalf of our clients. If you’d like to learn more about compliance and payroll processing services, please contact us.Button Text.