House Passes Payroll Tax Extension

The House has passed the Middle Class Tax Relief & Job Creation Act, H.R. 3630. Among other things the measure would extend the existing 2011 payroll tax holiday for one year, through 2012. Under current law, for 2011 only, employees and the self-employed are provided a two-percentage point reduction in their Social Security payroll (or self-employment) tax rate - decreasing the rate from 6.2% to 4.2%. This reduction applies to covered wages up to the maximum amount of earnings subject to the Social Security tax ($106,800 in 2011; $110,100 for 2012). The bill has been sent to the Senate for consideration.

Michigan Issues 2012 Withholding Supplement

Michigan has released additional withholding guidance for wages paid on and after January 1, 2012. There will be no new withholding tables for 2012 because the income tax rate will remain the same. (2012 Michigan Income Tax Withholding Guide Supplement.)