The “payroll tax holiday” is continuing for the rest of the year.
Initially, Congress enacted a two-month extension of the 2% reduction in the usual payroll tax rate for employees on wages up to the amount of the wage base ($110,100 for 2012). Now the reduction has been extended through the remainder of the year by the Middle Class Tax Relief and Job Creation Act of 2012.
The new law also repeals a recapture provision that applied to certain high wage-earners. The tax would have been triggered by excess earnings for the first two months of 2012. For more information, please contact your Condley and Company, L.L.P. advisor.