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The reduced FICA tax rate: Will it stay or go?

by on
in Office Management,Payroll Management

As part of an economic stimulus effort, the withholding rate in 2011 for the employee’s share of the Social Security tax was reduced from the usual 6.2% to 4.2%. That lower rate is scheduled to reset to 6.2% on Jan. 1, 2012, which means higher taxes and a smaller paycheck for employees—and questions for HR. This may change if Congress agrees to extend the 4.2% rate through 2012. The odds of that happening? More than 50-50.

Note: For 2012, the Social Security tax will be applied to employees’ first $106,800 in wages. Read more at www.theHRSpecialist.com/2012rates.

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