Payroll Tax Cut Extended
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T A X U P D A T E |
February 20, 2012 |
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Payroll Tax Cut Extended |
For additional information and discussion on this topic, please get in touch with your regular HW&Co. professional or one of our Tax Professionals listed below. Edward C. Lowe, CPA, MAFIS
Click here to see all of our previous e-newsletters. |
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On February 17, the House and Senate both passed the Middle Class Tax Relief and Job Creation Act of 2012. The bill includes three major provisions that affect payroll taxes, unemployment insurance and Medicare. 1. Payroll Tax Cuts – There is an extension of the 2% reduction in social security tax for employees for the remainder of 2012. The reduction is from 6.2% to 4.2%. This provision was set to expire February 29, 2012. The Social security fund will lose $100 billion in revenue which will be transferred to the fund by increasing the debt on the general fund. 2. Unemployment insurance – For most states, the unemployment insurance may be extended to a maximum of 63 weeks, however, for states with unemployment over 9% the benefits may be extended up to 73 weeks. Ohio’s unemployment rate was 8.1% for December 2011. 3. Medicare – The increased reimbursement rate for physicians known as the “Doc Fix” is enacted. President Obama is expected to sign the bill promptly. |
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