Payroll Tax Cut OK'd by Wide Margin

Submitted by rkoreto on Fri, 02/17/2012 - 14:05

An article in the Washington Post said that the payroll tax cut, which would expire at the end of this month, has been extended for the rest of the year. Unemployment benefits were also extended.

The two-percentage point cut in the 6.2 percent Social Security payroll tax will run through 2012 for about 160 million workers, according to the article. The vote was 293-132 in the House and 60 to 36 in the Senate. President Obama has said he will sign the bill.
 
The package does not offset the $100 billion tax provision, continued the Post, which had been a key sticking point in recent months.
 
As of early afternoon, whitehouse.gov had not yet announced the deal. But the site is continuing its "What Does $40 Mean to You?" campaign, a reference to the $40 per paycheck estimate that average family receives under the tax cut. Taxpayers are invited to submit online a description of they do with their extra $40—they can even upload photos and link to YouTube videos to make their points.
 
Meanwhile, as noted in a previous edition of the NYSSCPA E-zine, a recapture provision was slipped into the payroll tax cut when it was just supposed to be for January and February. In short, a provision imposed an additional tax on employees equal to two percent of the amount of wages employees received during that two-month period in excess of $18,350, but not greater than $110,100.
 
But with the break extended through the end of 2012, that provision is gone, reports the AICPA's Journal of Accountancy. The change was also reported in Forbes and in a report on the House Ways and Means Committee site.
 

 

 

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