Many employers and employees are just now becoming aware of the recently passed Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act of 2010). This new law will continue the Bush-era tax rates, which were set to expire on December 31, 2010, for two years, through December 31, 2012.
Also addressed through the TRA 2010 is a major change in the withholding of social security taxes from employees’ wages. For wages paid during 2011, the employee’s share of social security tax is being reduced from 6.2% to 4.2% for the first $106,800. The maximum that can be withheld will be $4,485.60, a $2,136 decrease from the 2010 maximum of $6,621.60.
Employers will continue to pay the full 6.2% of their employees’ covered wages paid in 2011 for their share of social security taxes.
These changes have been made within our PEO Payroll systems and are reflected in the net checks issued your employees and in the related payroll reports.
Should you have any questions concerning this tax reduction for your employees or any other payroll related matters, please contact your LL Roberts Group PEO Payroll or HR Representative (toll free) at 877.878.6463. Thank you again for the opportunity to serve your employee administration related needs.