FMX Update - OASDI Tax Rate Temporarily Extended at 4.2 Percent until Feb. 29, 2012

OASDI Tax Rate Temporarily Extended at 4.2 Percent until Feb. 29, 2012

The Internal Revenue Service (IRS) has confirmed that the Temporary Payroll Tax Cut Continuation Act of 2011 passed by Congress and signed into law on Dec. 23, 2011, temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012.

The IRS has advised that employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012.

For important details, please see OASDI Tax Rate Temporarily Extended.

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