01-26-2012 12:49 PM
I had not heard about a limit so I looked it up online. Hopefully, this article is correct and we do not have to do anything.
"The two-month bill originally passed by the Senate was modified in one form. The original bill required that employers limit the lower withholding to the first $18,350 (1/6 of the annual FICA limit of $110,000 for 2012), with the rate rising to 6.2% on any wages paid after that point. Responding to criticism about the costs to businesses of implementing such a cap, the bill removed that requirement.
However, that rule was replaced with a “recapture” provision that will be imposed on the employee. If an employee receives wages in excess of $18,350 during that two month period, the employee will have imposed an additional tax of 2% of such excess wages. That recapture tax would be paid with the employee’s 2012 Form 1040."
01-26-2012 12:24 PM
We have physician clients who have hit the $18,350 max for the rate reduction with the 2nd January pay. I assumed Peachtree's formulas would up the rate back to 6.2% once they went over the max but it continued their FICA rate at 4.2%. How do I fix/adjust this? Do we have to manually calculate with each payroll?
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