President Signs Tax Bill into Law
Posted on December 31, 2010
President Obama signed into law the Tax Relief,Unemployment Insurance Reauthorization and Job Creation Act of 2010 on December 17, 2010. This legislation will take effect January 1, 2011.
Here are some key aspects of the legislation:
* Employee Social Security payroll tax is reduced by 2.0% (from 6.2% to 4.2%) for one year starting with payrolls dated January 1, 2011.
* Income tax rates will remain at their current levels of 10, 15, 25, 28,33% and 35% based on income levels. These rates will remain in effect for two tax years, 2011 and 2012.
* The supplemental tax rate will remain 25% for 2011 and 2012.
* Unemployment benefits are extended through 2011.
* Businesses may write off any capital investments made from September9, 2010 through the end of 2011.
* The college tuition $2,500 credit is extended through 2012.
Additionally, the Making Work Pay Credit will expire December 31, 2010. While most employees will see an increase in their net pay because of the change in the social security rate, their federal withholding should increase slightly because of this credit expiration.
Paycor is taking all necessary measures to update our payroll services for all of our clients.
For more information about the tax-cut extension, go to http://www.irs.gov/newsroom/article/0,,id=232590,00.html..