The American Taxpayer Relief Act of 2012 which was signed into law resulted in a number of changes to the tax law. Among these changes was a change to the 2013 tables for Federal income tax withholdings. Listed below are a few of the tax changes that took effect in 2013.
Federal Tax: The IRS released REVISED Federal withholding tables on 1/3/13. These tables are based on the tax rates and brackets contained in the new law. Please refer to the site provided for further information. (http://www.irs.gov/pub/irs-pdf/n1036.pdf)
Social Security Wage Base: The 2013 social security wage base will be $113,700, an increase of $3,600 from the 2012 wage base of $110,100.
Social Security Tax Rate: The tax rate has increased from 4.2% to 6.2% for 2013 on wages up to the taxable wage limit of $113,700. The maximum Social Security tax that an employee would pay will be $7,049.40.
Medicare Tax Rate: Increases from 1.45% to 2.35% on wages earned over $200,000. The employer is required to withhold an additional Medicare tax at the point in the pay period when an employee’s annual wages exceed $200,000.
Each employee is required to submit a completed W-4 form to payroll when they are hired. The W-4 form remains in effect unless you submit a new form to the payroll office. We ask that every employee take a moment each year to review your current exemptions to determine if they are still accurate. To review your current W-4 exemptions; log into the portal and click on “Tax Forms” and then “W-4 Withholding Allowances”.
Claiming Exemption from Federal Withholding?
If you have claimed an exemption from income tax withholding on the W-4 form, the IRS requires employees to renew that status at the beginning of each year by completing a new W-4.
Need Assistance completing the W-4 form?
The IRS provides a Withholding Calculator to help ensure that you pay the correct amount of Federal Income Tax. The calculator will help to make sure that you do not have too much or too little income tax withheld from your pay. Click the link to the IRS website http://www.irs.gov/Individuals/IRS-Withholding-Calculator