Tuesday, January 25, 2011

Reduction in Employee Social Security Tax Rate

The Tax Relief Act of 2010 makes a major change in the withholding of social security taxes from employees' wages by reducing the employee share of social security tax from 6.2% to 4.2% for the first $106,800 of wages paid in 2011. The maximum that can be withheld will be $4,485.60, a $2,136 decrease from the 2010 maximum of $6,621.60.

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