12/29/11

The Internal Revenue Service will be issuing guidance on the temporary two-month extension of the payroll tax cut.  The Temporary Payroll Tax Cut Continuation Act of 2011, passed last Friday, temporarily extends the reduction of the Social Security tax withholding rate from 6.2 to 4.2 percent on wages paid through February 29, 2012.  The Act also includes a new "recapture" provision, which applies only to those employees that receive more than $18,350 in wages during the two-month period.  The Social Security wage base for 2012 is $110,100.