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Employee Tax Update: Bill Signed Extending Payroll Tax Cuts Through the End of 2012

 

On February 22nd, President Obama signed the Middle Class Tax Relief and Job Creation Act of 2012 into law, which extends the current payroll tax cut through the end of the year.

 

The $143 billion dollar measure includes extending the 2% cut on the employee side of the payroll tax through the end of the year. The employer tax rate for social security will remain at 6.2%.

 

This extension will benefit employees. For example, an employee whose wages for 2012 are $50,000 will save an extra $1,000 ($50,000 x .02%) for the year. Employees with wages of at least $110,100 (the maximum wage base for social security) will enjoy a maximum savings of $2,202 ($110,100 x .02%).

 

Please contact Dave Berthon, Principal at Berntson Porter & Company, at 425-289-7624 or dberthon@bpcpa.com with questions regarding the tax implications of the Middle Class Tax Relief and Job Creation Act.

 

 
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