Payroll Tax Cut Extended through 2012

By Chris Bevington, CPA

As expected, the 2% payroll tax cut reducing the employee portion of social security tax from 6.2% to 4.2% of wages has been extended through the end of 2012.  Click on this link for a short article explaining the details of the extension. 

Also of note, the recapture provision, which imposed an additional tax on employees who receive more than $18,350¹ in wages during the two-month extension period,  not only won’t be extended, but those who would have owed tax for January and February wages won’t have to pay the tax for those two months either.

¹The Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount.