The cut in payroll taxes approved in the federal tax bill will start showing up in your pacycheck this month. Internal Revenue Service spokesperson, Christopher Miller, says you’ll see a decrease in the amount of money taken out each month for the Social Security tax.
He says the withholding rate will go from 6.2% to 4.2% of wages paid. Miller says they are urging employers to make the change as quick as possible, but you may not see it in your first checks of the new year. Miller says they recognize the late enactment of the change may make it difficult for some employers to quickly update their withholding tables and payroll system, so they ask them to adjust them as quickly as possible and not later than January 31st.
Miller says employees should keep an eye on their checks to see if the change is made, but otherwise don’t have to take any action.
Miller says the change is being made by employers and their payroll companies, so it won’t take additional action by employees, such as filling out a new W-4 form.
Miller says the reduced Social Security withholding will have no effect on your future Social Security benefits. The I.R.S. also announced that the deadline for filing your taxes for 2011 has been moved from April 15th to April 18th due to a holiday in the District of Columbia. For more information on I.R.S. and tax questions, go to their website at:www.irs.gov.