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

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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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