In the waning hours of New Year’s Day, Congress passed a bill averting a plunge off the “fiscal cliff,” setting 2013 tax rates—and providing an unexpected boost for employee training and commuter subsidies.
The law made permanent the Bush-era tax rates for all but the highest earners. It declined to extend the “payroll tax holiday,” which in 2011 and 2012 lowered employees’ share of the payroll tax from 6.2% to 4.2%.
But the law also included several benefit-plan provisions, including making permanent an employee tax exclusion for up to $5,250 in employer-provided tuition assistance and more favorable tax status for mass transit passes.
For details on the new law and links to the new IRS tax tables, read "Fiscal cliff averted: New law sets 2013 withholding rates; 'payroll tax holiday' expires."