Payroll 2013

[S T]

I am sure that most everyone that processes payroll knows - or - has received the notice,

That so far what is scheduled beginning 2013 on Medicare deduction from EE payroll will increase.

Beginning January 1, 2013, employers will be responsible for withholding an additional 0.9% Medicare tax on individual employee wages paid over $200,000 in a calendar year. There will be no employer match required for the additional 0.9% tax.

Thought I would post just in case and there might even be more changes depending.

Sandy

[John of PA]

Also Soc Sec withholding is increasing from 4.2% to 6.2% on Jan 1st. Wow, hold onto your wallets.

[S T]

Thanks John PA for that info, however, was not in my payroll service notice. I did a little outside research, possibly could happen, but as far as I know has not been ruled on yet! As of an 8/14/2012 and 9/11/2012 article

so it seems FICA - EE would remain at 4.2 and ER at 6.2

The Social Security or OASDI portion of the FICA payroll tax is currently 6.2 percent for employers and 4.2 percent for employees for wages up to $110,100 in 2012. The government has yet to rule one way or the other whether the 4.2 percent Social Security tax rate for employees will be extended into 2013

2013 FICA Tax Rate: Normally, the rate is 7.65% in total, and 6.2% for the Social Security portion but it has been reduced by 2% to 4.2% over the past few years as part of what was supposed to be a payroll tax holiday to help with the economic recovery following the Great Recession. However, once politicians give their constituents something, it’s hard to take away (like how the Bush tax cuts were set to expire but keep being renewed and then called a “tax hike” if they are allowed to lapse). Therefore, I envision as part of the preparation for the “Fiscal Cliff” coming up at the end of 2012, there will probably be calls to further extend the payroll tax holiday for another year. If nothing happens, the rate will revert to 6.2% and everyone will see an increase of 2% over what they paid this year up to the cap, but I’d put decent odds on holding the 4.2% rate, especially to be timed prior to the election.

As with many other 2012 expiring tax issues, here we are!

Sandy

[ChEAr$]

I may be going out on a limb here, but for congress not to renew the 2% cut will mean an immediate tax increase of $1,000 for a person making 50,000$; twice as much for married couple with each making that.
Do you sense some political implications? You betcha.

That might even form a question for candidates during the presidential debates, you reckon?