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Department of Employee Trust Funds
January 4, 2013

Update on 2013 Social Security Employee Tax Rate

The American Taxpayer Relief Act of 2012 approved by Congress on January 1, 2013, did not include an extension of the 2% employee Social Security payroll tax cut. Federal legislation that reduced the employee rate from 6.2% to 4.2% for 2012 expired on December 31.

As a result, the employee Social Security tax rate will be 6.2% for 2013. The Internal Revenue Service (IRS) is advising employers to implement the 6.2% employee rate as soon as possible, but no later than February 15, 2013. For more information, please see the Department of Employee Trust Fund’s (ETF) Social Security Employer Bulletin, dated December 12, 2012, and IRS Notice 1036.

New Additional Medicare Tax for 2013

The new Additional Medicare Tax applies to wages and compensation in excess of $200,000 in a calendar year received after December 31, 2012, at a rate of 0.9%. Therefore, an employer must withhold the Additional Medicare Tax from wages it pays to an individual in excess of $200,000 in a calendar year, without regard to the individual’s filing status or wages paid by another employer. Employers may find the IRS Questions and Answers for the Additional Medicare Tax document helpful.

For more information about this update, please contact ETF's Employer Communication Center at toll free (888) 681-3952 or (608) 264-7900.


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