IRS Releases Tax Tables for 2011 for Withholding and Lower Social Security Tax Rate
12/21/10
The Internal Revenue Service released withholding tables for employers to use in 2011. The IRS was later compared to prior years in releasing the tables because of uncertainty over whether the current tax rates would extend to 2011. In Notice 1036, employers are directed to use the new withholding tables as soon as possible and no later than January 31, 2011.
The 2011 withholding tables reflect not only the continuation of lower tax rates enacted by the Economic Growth and Tax Relief Reconciliation Act in 2001, but also the lower Social Security tax rate for employees (4.2%), instituted for 2011 by the Tax Relief act. For 2011 only, the bill reduces the rate for the Social Security portion of payroll taxes to 10.4%, by reducing the employee rate from 6.2% to 4.2% (the employer’s portion remains at 6.2%). Instructions were also made to correct by March 31, 2011 for any overwithholding of Social Security tax that may result from a failure to adjust for the 4.2% rate at the start of the year.
To access IRS Notice 1036, click on the link below.
