my hr dept just sent this out... figured i'd share.
Tax Changes Affecting 2013 Paychecks -What You Need to Know
The House and Senate have passed H.R. 8, theAmerican Taxpayer Relief Act of 2012 (ATRA), which includes several changes totax laws affecting payroll and employment tax administration in 2013.PresidentObama is expected to sign the bill into law within 24 hours.
Will the employee Social Security rate be changed?
Yes, the employee Social Security rate has increased to 6.2% with a taxable wage limit of $113,700.00. In 2011 and 2012, this rate was temporarily dropped to 4.2%
Will the employee Medicare rate be affected?
Yes, Medicare Tax will increase by 0.9% for all employees earning over $200,000.
Please seebelow for changes included in the 2013 legislation.
Income Tax Withholding Rates: The American TaxpayerRelief Act effectively maintains the reduced income tax rates adopted in 2001and 2003 for individuals earning up to $400,000 and families earning less than$450,000. Income above those levels will be taxed at 39.6%, up from 35%. The expanded 15% bracket for joint filers, commonly referred to as the marriagepenalty relief, has also been extended.
These taxrates have been extended permanently for wages paid after December 31,2012.
Wage Withholding Rate: Because thewithholding rate for “supplemental wages,” such as bonuses andcommission under $1 million, was not dependent on issuance of IRSwithholding tables, The IRS implemented the withholding rate of 28% that wasstatutorily in effect for supplemental wages paid in 2013. For supplementalwage payments over $1 million in a year after 12/31/2012, the withholding ratewas increased from 35% to 39.6%.
Tax Changes Affecting 2013 Paychecks -What You Need to Know
The House and Senate have passed H.R. 8, theAmerican Taxpayer Relief Act of 2012 (ATRA), which includes several changes totax laws affecting payroll and employment tax administration in 2013.PresidentObama is expected to sign the bill into law within 24 hours.
Will the employee Social Security rate be changed?
Yes, the employee Social Security rate has increased to 6.2% with a taxable wage limit of $113,700.00. In 2011 and 2012, this rate was temporarily dropped to 4.2%
Will the employee Medicare rate be affected?
Yes, Medicare Tax will increase by 0.9% for all employees earning over $200,000.
Please seebelow for changes included in the 2013 legislation.
Income Tax Withholding Rates: The American TaxpayerRelief Act effectively maintains the reduced income tax rates adopted in 2001and 2003 for individuals earning up to $400,000 and families earning less than$450,000. Income above those levels will be taxed at 39.6%, up from 35%. The expanded 15% bracket for joint filers, commonly referred to as the marriagepenalty relief, has also been extended.
These taxrates have been extended permanently for wages paid after December 31,2012.
Wage Withholding Rate: Because thewithholding rate for “supplemental wages,” such as bonuses andcommission under $1 million, was not dependent on issuance of IRSwithholding tables, The IRS implemented the withholding rate of 28% that wasstatutorily in effect for supplemental wages paid in 2013. For supplementalwage payments over $1 million in a year after 12/31/2012, the withholding ratewas increased from 35% to 39.6%.
