News Flash – QuickBooks Payroll Getting Ready for 2012
Here comes 2012! We hope you enjoyed your holidays. In this email, read about tax changes that will be in place starting next year.
Payroll Tax Updates
Here’s the latest on what’s changing for 2012. Intuit has updated their service to incorporate all the changes below, so you don’t have to worry.
- Social Security wage base increase –The Social Security wage base will increase to $110,100 starting 2012.
- Extension of reduced employee Social Security tax rate – President Obama signed the Temporary Payroll Tax Cut Continuation Act of 2011 (H.R. 3765). The Act includes a two-month extension of the reduced employee Social Security tax rate of 4.2% through February 29, 2012.
- FUTA Surtax changes – The FUTA tax rate was 6.2% from January 1, 2011 through June 30, 2011, and decreased to 6.0% July 1, 2011 through December 31, 2011. FUTA tax is calculated using the rate in effect when the wages were paid. Form 940 for small business filers and Form 1040 SH for household employers will report split wages and tax calculations in 2011. When filing FUTA tax returns, some employers may be prompted to enter more information about their paycheck history to correctly calculate the FUTA tax.
- Credit reduction states – A state that has not repaid money it has borrowed from the federal government to pay unemployment benefits is a “credit reduction state”. If you pay wages in a credit reduction state, you will pay more FUTA tax. The following states are credit reduction states: AR, CA, CT, FL, GA, IL, IN, KY, MI, MN, MO, NC, NJ, NV, NY, OH, PA, RI, VA, and WI.
This article is provided for informational purposes and is not intended to be construed as legal, accounting, or other professional advice. For further information, please consult appropriate professional advice from your attorney and certified public accountant.