Payroll Tax Cut Expected to Extend Through 2012
Congress is expected to extend payroll tax cuts, continuing to reduce Social Security withholding for employees from 6.2% to 4.2%.
As previously reported, the Temporary Payroll Tax Cut Continuation Act was enacted in late 2011 to extend the 4.2% Social Security tax rate employees had received during 2011. The Temporary Act expires on March 1, 2012, restoring the employee Social Security tax rate to its original 6.2%. The extension Congress is tentatively expected to pass would maintain the 4.2% tax rate through the remainder of 2012. The employer rate remains unchanged at 6.2%.
While Congress has reached a tentative agreement, no regulatory changes have officially been enacted. Nextep will continue to closely monitor the situation to ensure compliance for our clients.
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