Thursday, January 13, 2011

Reduced Social Security tax rate for 2011?

I received this email from corporate today:

Congress recently passed the 2010 Tax Relief Act, which includes a provision reducing employees’ FICA tax withholding rate by 2 percent for compensation received in 2011. The standard withholding rate for many years has been 6.2 percent on wages up to a specific threshold each year. 

For 2011, this will become 4.2 percent on the first $106,800 in wages paid by the Company. Beginning with your January 14, 2011 paycheck, and continuing through 2011 for earnings up to $106,800, you will see a corresponding increase in your take-home pay. The rate is scheduled to return to 6.2 percent in 2012.  

Due to the timing of this change notification, the old FICA TAX rate will still be reflected on printed paycheck stubs this pay period. The rate calculation is correct (4.2 percent); only the description line (indicating 6.2 percent) is incorrect. We have been assured the description line will be corrected for the Jan. 28 pay day. 

Thank you for your understanding.

I had not heard at all about this. But I'm not complaining. Nor am I going to hit that $106,800 limit.

Still, the increase will be nice. It will let me take my kids to one dinner extra out, per paycheck. Or something equal to that. If I don't go to too nice a place.

Thanks America!

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