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Reminder: Employee Payroll Tax Cut Expires

 

The Social Security payroll tax cut for employees (which had been in effect since 2011) has expired as of the end of December 2012. As a result, the combined FICA tax rate  for employees in 2013 is 7.65%, with the Social Security portion of the tax at 6.2% of earnings up to the first $113,700 of wages. And don’t forget that under Health Care Reform, for taxable years beginning after December 31, 2012, employers are required to withhold an Additional Medicare Tax  (at a rate of 0.9%) from wages paid to an employee in excess of $200,000 in a calendar year.

Employers should confirm that payrolls will reflect the new tax rate(s) and watch for further updates on IRS.gov.

 

 

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