2012 Social Security Tax Update

The 2011 Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provided a two percentage point payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid.  This reduction was set to expire on December 31, 2011 however, on December 23rd, President Obama signed legislation that extends the 4.2 percent rate for the employee portion of Social Security tax  into the first two months of 2012 (H.R. 3765). Additional information can be found on IRS.gov under the following link; http://www.irs.gov/newsroom/article/0,,id=251650,00.html