Reduction of Social Security Withholding Rate for 2012

Date
2012-03-30
Authors
Harl, Neil
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Iowa State University Digital Repository
Abstract

The Congress, in late 2011, temporarily extended the two percentage point Social Security tax reduction for employees that was in effect for 2011, continuing the reduction of the withholding rate from 6.2 percent to 4.2 percent of wages paid through February 29, 2012.1 The original rate reduction was in the Tax Relief Act of 20102 which reduced the employee share of the OASDI portion of Social Security taxes from 6.2 percent to 4.2 percent for wages earned in calendar year 2011 up to the taxable wage base of $106,800.3 For self-employed individuals, the reduced rate was 10.4 percent on self-employment income up to the threshold of $106,800.4

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