Social Security tax rates increase

Effective Dec. 31, 2012, the Tax Relief Act of 2010 and its extensions expired causing all employees’ Social Security tax rate to rise from 4.2% to the previous 6.2% rate. This expiration means that an additional $2 will be withheld from employees’ paychecks for every $100 earned, beginning with the Jan. 15 payroll, and continuing for all future payrolls. The Social Security tax rate had been temporarily reduced by Congress for the years 2011 and 2012, in what was referred to as a payroll tax holiday.

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