Payroll Tax Provisions Set to Expire in 2013
Posted on December 13, 2012
Several payroll-related Internal Revenue Code provisions are set to expire by the end of the year. Included among these are:
* Income tax cuts: The 10 percent tax bracket would expire, leaving
tax brackets at 15 percent, 28 percent, 31 percent, 36 percent and 39.6
* Payroll tax holiday: The employee Social Security rate would revert back to its original amount of 6.2, instead of the reduced holiday rate of 4.2.
* Employer-provided educational assistance: Employers would no longer be able to provide tax-excluded educational assistance for employees pursuing advanced degrees.
* Adoption assistance: Tax-excluded adoption assistance of up to $12,650 is currently allowable; it is set to fall to as little as $5,000 on January 1, 2013.
The Medicare tax rate is also set to increase from 1.45% to 2.35% on individuals with wages greater than $200,000 ($250,000 for married couples filing jointly) on January 1, 2013. Learn more about the Additional Medicare Tax.
The Paycor system has been updated to reflect these changes. We will continue to closely monitor the tax legislation and will relay any additional updates as they are released.