On December 23, 2011, President Obama signed into law the Temporary Payroll Tax Cut Continuation Act of 2011 (H.R. 3765). The Act includes a two-month extension of the reduced employee Social Security tax rate, maintaining the employee portion of the social security tax rate at 4.2% through February 29, 2012.
According to the Act, the employee tax rate for social security will revert to 6.2% on March 1, 2012, unless the federal government acts to further extend the law or change the rate. Due to this change, Ashgrove Payroll will be making the necessary modifications to support the employee portion of the Social Security tax 6.2% rate.
You will not have to do anything because our payroll service will automatically revert to the new (6.2%) rate. It might be a good idea however, to let your employees know that after March 1st, they will notice an additional 2% tax deduction on their gross wages.
If the federal government passes a new law that extends the date or changes the tax rate, Ashgrove Payroll will implement the changes to comply with the new law.