The IRS has yet to release the 2012 percentage method and wage-bracket withholding tables. As soon as it does, we'll post them online. It did, however, release the 2012 inflation-adjusted withholding allowance amounts and the amounts employees can defer from their pay for qualified transportation. Also unsettled is the Social Security tax rate for 2012. (Rev. Proc. 2011-52, IRB-2011-45)
2012 withholding allowance amounts. Employees may claim zero withholding allowances on their W-4 forms. If they claim more than one allowance, multiply the value of one allowance by the number they’ve claimed. The value of one allowance per pay period in 2012 is:
Qualified transportation fringes. The 2010 Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act extended through 2011 the increase in the amount employees can exclude from their income for qualified mass transit expenses. The amount: $230 a month, the same amount that can be excluded for employer-provided parking.
The IRS’ inflation-adjusted figures for 2012 assume that Congress will not again extend this parity provision—$240 for parking and $125 for transit passes and rides in commuter vehicles. Bicycle fringes are $20 a month, and can’t be funded on a pretax basis.
GET THE WITHHOLDING TABLES WHILE THEY’RE HOT: As soon as they’re released,Legal Alert will post the 2012 percentage method and wage-bracket withholding tables to www.theHRSpecialist.com/2012rates.