Temporary Payroll Tax Cut Continuation Act of 2011

The Temporary Payroll Tax Cut Continuation Act of 2011 extended the reduced employee FICA tax rate for two more months through the end of February 2012.  For someone making $50,000 that means about $80.00 a month.  This of course does not take into account any other pre-tax items a taxpayer may be participating in. 

Those Taxpayers who make above the Social Security Wage base of $110,000 could be subject to a recapture of any additional benefit they may have received during this period.

So, what does this really mean?  Well, we don’t know.  Many people believe that Congress will go ahead and extend this for the whole year. If so, then the taxpayer will benefit from this all year.  If not, then of course, it is just one more complication when it comes tax time next year.

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