700 Graham Rd
Cuyahoga Falls, OH 44221
The following is the Tax Table Information we have so far…
In response to Paulette’s email yesterday to SSDT…
See entry 1277 it explains the current state of this. To summarize we are waiting for the IRS to release revised tables for 2013 that addresses the fiscal cliff deal reached yesterday. Once they provide the tables we will update the software ASAP. The 2013 tables released via notice 1036 and referenced in IR-2012-105 (http://www.irs.gov/uac/Newsroom/IRS-Provides-Guidance-on-Withholding-in-2013) were released on December 31st and do not reflect the deal that was reached. As stated in the notice the IRS will release revised tables since legislation has now passed in Congress and the President has stated he will sign it. That means the tables currently in Notice 1036 are essentially irrelevant and we need a copy of the revised tables, so 2013 withholding can be correctly implemented.
So, long story short...we are waiting on the IRS.
After a preliminary analysis of the legislation that was passed last night by the Congress. It is our understanding that extending the payroll tax cut, which effected the employee Social Security withholding percentage (temporarily reducing it to 4.2 percentage for employees) was not included as part of the agreement. Assuming the legislation is signed into law by the President, the employee withholding for Social Security will need to change from the current 4.2% to 6.2%. The CHGDED program can be used to update the employee percentage on the FICA DEDSCN record.
Initial IRS guidance states that this change needs to be implemented “as soon as possible in 2013, but no later than Feb. 15, 2013”. If any pays are processed in 2013 using the 4.2% rate the under withholding will need to be corrected via error adjustments “as soon as possible, but no later than March 31, 2013”.
At this time the IRS has not released the updated 2013 withholding tables based on the legislation that has passed Congress. We assume they will not do so until after the President has signed the bill into law. We are continuing to monitor this aspect of the situation and will release updated 2013 federal withholding tables as soon as possible. Based on the deal that was reached it appears rates will remain unchanged from 2012 levels for the vast majority of employees paid via USPS. However, it is possible the brackets themselves could change from the wage ranges used in 2012, which could affect withholding. We will not know if this is the case until we see the 2013 tables, but we will keep you abreast of the situation.