Congress Extends the Reduced Social Security Rate for Employees

Posted in Articles, Tax Highlights January 2012

Keywords: payroll taxes, tax

On December 23, 2011 Congress passed and President Obama signed into law the "Temporary Payroll Tax Cut Continuation Act of 2011." The two percent social security tax rate cut has been extended through February 29, 2012 for the employee side of payroll taxes and self-employed individuals. 

The law also added a recapture provision applying to employees earning more than $18,350 in wages during the first two months of 2012. This provision adds back the two percent savings on earnings between $18,350 and $110,100 (2012 social security wage base) received by February 29, 2012. The additional tax is to be reported on the individual's 2012 income tax return and will be payable in 2013. 

A House-Senate Committee will be convening to consider extending this temporary payroll tax cut to all of 2012, which may remove the provision for recapture. 

Please contact Corey Crane at ccrane@BlackmanKallick.com or 312-980-3377, Cara Hoffman at choffman@BlackmanKallick.com or 312-980-3274, or your Blackman Kallick tax advisor for further details.

 

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.


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This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.