Employee Social Security Tax Cut Now In Effect
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IRS Releases New Withholding Details
Employers and payroll departments, take note.
Effective January 1, 2011, the Social Security tax withheld for employees has been reduced from 6.2% to 4.2%. Introduced as part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010, the 2% reduction will boost take-home pay for workers.
Steps to take now: - Reduce the amount of Social Security tax withheld from 6.2% to 4.2%. This change must be made as soon as possible, and not later than January 31, 2011.
- Offset any Social Security tax over-withheld during January as soon as possible, and not later than March 31, 2011.
Please note that this change ONLY affects the employee's share of Social Security tax. Employers are still required to pay a 6.2% Social Security tax on employee wages. The Medicare Tax withholding rate remains 1.45%.
If you have any questions, please contact your HB&K tax professional. For more information visit: IRS Newswire: "Payroll Tax Cut to Boost Take-Home Pay for Most Workers"
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Hartmann, Blackmon & Kilgore P.C. is one of the Gulf Coast's leading CPA and business consulting firms, and is ranked by Business Alabama as one of the top-tier accounting firms in the state. The company was founded in 1990 as a certified public accounting practice, and has grown to include consulting services such as business valuation, litigation support and estate planning. HBK serves as a strategic partner to many of the leading businesses and municipalities throughout the Gulf Coast, as well as a variety of individuals and entrepreneurs.
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