Monday December 19, 2011 Update: What appeared a certainty two days ago is suddenly in jeopardy today. The House of Representatives is poised to reject the Senate's 2 month extension of the payroll tax holiday - insisting on a bill that funds the extension for a full year. We are watching this...
The temporary 2% reduction in employee Social Security Tax deductions, scheduled to expire December 31,
has been extended two months may be extended two months, through February 2012, in a rare Saturday session of the US Senate. The bill is schedule to be voted on in the House of Representatives Monday December 19.
All household employers who pay their household employee directly (nanny, housekeeper, maid or elder caregivers) should recalculate their employee's payroll tax withholding prior to writing the first paycheck in 2012. Federal income tax withholding will change, as well as many state tax rates. The 4nannytaxes.com Household Paycheck Calculator is being continuously updated as rates are published. This is also a good time to ask your employee(s) to review their payroll withholding (Form W-4) and adjust exemptions where necessary.
Changes to tax rates, employer reporting, and employment rules and regulations have come at a rapid pace in the last several years. Employers who prefer to outsource the responsibility for compliance with new rules and regulations may consider HomeWork Solutions' full payroll service (NaniPay). Go ahead, simplify!