2013 Payroll Tax, 401(k), and W-2 Update
Jan. 11, 2013
2013 Payroll Information effective with your January 15, 2013 pay check:
Tax Rate Changes
One of the recent changes in the legislation passed by Congress affects Social Security (FICA) taxes withheld from employees' pay checks. Effective January 1, 2013, the employee share of Social Security increased from 4.2% to 6.2%, resulting in more FICA taxes being withheld from your pay check. The 2013 Social Security wage base limit increased to $113,700, which is up from $110,100 in 2012.
Additionally, the Medicare tax rate will increase 0.9%, from 1.45% to 2.35%, on wages paid over $200,000 in a calendar year. This additional tax only applies to wages that exceed the $200,000 threshold, not to the first $200,000.
The American Taxpayer Relief Act imposed a new tax rate for single individuals with taxable income above $400,000; married couples filing joint returns with taxable income above $450,000; and heads of household with taxable income above $425,000. Income above these thresholds will be taxed at a 39.6 percent rate, effective January 1, 2013.
As a reminder, the open enrollment period for the 401(k) Group Supplemental Retirement Annuity contributions was held from December 4, 2012 through December 14, 2012. If you did not go into the system to opt out or change the amount, your 401(k) contribution for 2013 will be 5% of your current base salary. If you wish to change your 401(k) for future checks, you must complete a paper form with the Human Resources Department.
2012 W-2 Changes based on the Patient Protection and Affordable Care Act
The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee's Form W-2. The amount reported does not affect tax liability, and the purpose of the reporting requirement is to provide employees useful and comparable consumer information on the cost of their health care coverage.
The 2012 W-2s will be mailed by January 31, 2013 to your address on file in the timesheet system. Please verify your address in the Deltek Time and Expense system (the timesheet/ESS system) under the Personal section on the left side of the screen, especially if you have moved within the last year.