Bulletin: Social Security Tax Rate Reduction Extended through 2012 (Posted February 24, 2012)
The Social Security tax rate decrease first implemented in 2011 has been extended through December 31, 2012 by the Middle Class Tax Relief and Job Creation Act of 2012. This continues the reduction in the employee Social Security tax rate from 6.2% to 4.2%. Pending further legislation, the Social Security tax rate will revert to 6.2% on January 1, 2013.
The tax rates in effect for 2012 are summarized in the table below. You may update your federal and/or state income tax withholding allowances at any time by clicking the Edit W4 and DE4 Information link on the Employee Information tab in Axess. Click here for step-by-step instructions.
|Tax Deduction Code||Description||Tax Rate|
|Fed Withholding||Federal Income Tax||W-4 Rate|
|Fed OASDI/EE||Social Security||4.2% on first $110,100 wages earned|
|CA Vol Dis/EE||Short-Term Disability||1.0% on first $95,585 wages earned|
|CA Withholding||State Income Tax||DE-4 Rate|