End of temporary Social Security tax relief plans means less in paycheck

In a world of point and counterpoint, here’s a little less-than-glowing news to counteract the good news regarding the PERSI return.

Today’s paycheck, the first since the Social Security tax rate increased due to the expiration of the Middle Class Tax Relief and Job Creation Act of 2012, will be a little lighter than we’re used to – about $2 less per every $100 of the check amount. The withholding rate returns to 6.2 percent from the 4.2 percent it had been reduced to under the taxpayer relief measure.

It had been reduced for the last two years, first under an act by Congress in Dec. 2010 that was extended through the Temporary Payroll Tax Cut Continuation Act of 2011 and again through the Middle Class Tax Relief and Job Creation Act of 2012. As of Jan. 1, 2013, the rate of 6.2 percent was restored for the first $110,100 of wages.

“Nobody knew until the last minute that this temporary tax relief would not be extended,” said ITD Controller Gordon Wilmoth, who added that the increased revenue would “help sustain the viability of the Social Security Trust Fund.”

Published 1-4-2013