IRS releases income tax withholding tables reflecting 2013 changes
January 18, 2012
Article courtesy of SBAM Approved Partner ASE
As employers begin issuing 2013 paychecks, here is a summary of new withholding rates and changes affecting Social Security and Medicare rates, directly from the IRS.
Updated tables, which were issued by the IRS after President Obama signed the American Taxpayer Relief Act of 2012, show the new rates in effect for 2013. They supersede tables issued on December 31, 2012. The newly revised version of IRS Notice 1036 contains the percentage method income-tax withholding tables and related information that employers need to implement changes for 2013.
Employers should also begin withholding Social Security tax at the rate of 6.2 percent of wages paid following the expiration of the temporary two-percentage-point payroll tax cut that was in effect for 2011 and 2012. And the tables incorporate the new 0.9 percent Medicare tax (in addition to the 1.45 percent withheld by employers).
Employers should start using the revised withholding tables and correct the amount of Social Security tax withheld as soon as possible in 2013, but not later than February 15, 2013. For any Social Security tax under-withheld before that date, employers should make the appropriate adjustment in workers’ pay as soon as possible, but not later than March 31, 2013.
Employers and payroll companies will handle the withholding changes, so workers typically don’t need to take any additional action, such as filling out a new W-4 withholding form.
As always, however, the IRS urges workers to review their withholding every year and, if necessary, fill out a new W-4 and give it to their employer. For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms.