Late breaking news out of Washington
Prior to adjourning for the Holidays a spending package was signed into law by President Obama. Key among these provisions are two changes that will impact a number of Americans:
| 1. |
Temporary extension of the employee payroll tax break. The employee portion of Social Security will remain at 4.2% versus the normal 6.2% for two months through February 29th, 2012. |
What this means:
- You'll have to review your next paycheck to ensure the Social Security withholding did not revert back to 6.2%. Congress' action seems to be oblivious to the chaos it creates for the payroll departments across the U.S. Companies have until January 31, 2012 to make this change, and they have until March 31, 2012 to adjust workers' pay for any implementation delay.
- Don't plan on having this extra money in your wallet throughout the year. The lower tax has only been approved for 60 days into 2012 because there was no consensus on how to pay for the tax break.
- Don't plan on heavy loading your pay into the first two months of 2012 to gain a tax advantage. You will receive a 2% additional tax for any income received in excess of $18,350 during January/February.
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| 2. |
Extension of unemployment benefits to those out of work for some time. Federal Emergency Unemployment Compensation (EUC) benefits have been extended for an additional two months for all benefit tiers. |
What this means:
- If you are currently on unemployment and expect your benefits to expire shortly, please check to ensure you qualify to continue to receive them.
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Stay tuned. When Congress reconvenes in early 2012, they are sure to discuss extending these benefits throughout calendar year 2012.