Calendar Year 2011/2012 Tax Information

The following calendar year (CY) 2011 and 2012 tax information is provided by University Financial Services:

Employees may inquire locally after they have received their first paycheck(s) for CY 2012 with questions about tax withholding fluctuations versus 2011.

Social Security and Medicare taxes (wage base changed from $106,800 in CY11 to $110,100 for CY12).

Individuals who met the Social Security max in 2011 ($106,800) may see an increase in Social Security withholding effective 1/1/12. For the new calendar year, they are now subject to the Social Security Tax (4.2%) until they reach the maximum for CY 2012.

  • Effective 1/1/11 a temporary two percentage payroll tax cut for employees, reducing their Social Security tax withholding rate from 6.2 percent to 4.2 percent of taxable wages paid was put in place for CY11. The IRS announced on Dec 23 that the Social Security employee withholding tax rate will continue at the reduced rate of 4.2% until Feb 29, 2012. This means in March the tax rate will revert back to the 2010 rate of 6.2% unless the IRS advises otherwise.

Massachusetts State Taxes

Massachusetts allows a deduction for Social Security tax and Medicare tax withholding. This exemption is automatically honored until an individual pays $2,000 in social security (FICA and Medicare) taxes. When $2,000 in social security taxes have been withheld, the exemption is turned off - usually in the spring.

Individuals will see a slight decrease in their MA State tax withholding effective 1/1/12.

The Massachusetts Department of Revenue has reduced the state withholding tax rate from 5.3% to 5.25%, effective Jan 1, 2012.

2012 Supplemental Tax Rate:

Federal - 25%, MA state 5.25%, Social Security and Medicare 5.65% until 3/1/12 then 7.65% Total = 35.90% until 3/1/12 then 37.90%

For more information, please see the 2011 tax reporting documents issued by UFS

Tag: Taxes

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