PeopleSoft Payroll for North America is closely monitoring the status of legislation currently pending in Congress to extend the current reduced 2012 employee Social Security tax rate of 4.2 % beyond its currently scheduled expiration at the end of February.
If the current reduced employee Social Security tax rate of 4.2 % is extended to remain in effect for the entire 2012 tax year, customers will not be required to take any action, and no product modifications will be required or delivered.
If the current reduced employee Social Security tax rate of 4.2 % is not extended, and the tax rate reverts to the higher rate of 6.2 %, PeopleSoft Payroll for North America is prepared to act quickly to immediately provide customers with the necessary product modifications to implement the higher tax rate as soon as instructions are finalized and published by the Internal Revenue Service.
Under the provisions of the legislation that enacted the two-month extension of the lower tax rate, should the lower tax rate not be extended for the remainder of 2012, employers will not be required to retroactively correct or adjust taxes deducted for employees whose taxable earnings exceed the 2012 taxable wage base; any additional tax amount owed by such an individual will be recaptured on the employee’s individual personal income tax return for 2012.
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