The Tax Relief Act was signed into law by President Obama on December 17, 2010. Followings Q&A will help you better understand the payroll tax cut.
Q: What are the changes caused by recent Tax Relief Act?
A: For Year 2011, the employee tax rate for social security is reduced to 4.2%. The employer tax rate for social security remains unchanged at 6.2%.
Q: Are all employers affected by this payroll tax cut?
A: Yes, all employers are impacted by this change from Jan 1, 2011. Both for-profit companies and nonprofit companies need to adjust their payroll processing for the Social Security tax rate.
Q: What should employers do?
A: IRS asked Employers should start using the new withholding tables and reducing the amount of Social Security tax withheld as soon as possible in 2011 but not later than Jan. 31, 2011.
For any Social Security tax over withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2011
Q: What impact will this have on employees?
A: Millions of workers will see their take-home pay rise during. This reduced Social Security withholding will have no effect on the employee’s future Social Security benefits.
Q: Has Year 2011 Federal Tax Rate Changed?
A: Employer can find it at http://www.halfpricesoft.com/Federal_income_tax_2011.asp.
Q: Will all employee see the bigger checks in Year 2011?
A: No, 51 millions will take home less
Halfpricesoft.com released the new version of ezPaycheck payroll software which includes the latest new tax tables released by the Internal Revenue Service. These tax tables incorporate the changes introduced by the Tax Relief Act, which was signed into law by President Obama on December 17, 2010.
ezPaycheck payroll software is loaded with intelligent, intuitive features, but not burdened by complicated suites of expensive applications small businesses will never use or need. The software is ideal for owners of small to mid-sized businesses, and was designed and engineered for ease-of-use by those who have only basic computer skills and little accounting know-how.
Learn more about ezPaycheck payroll software at http://www.halfpricesoft.com/index.asp