New federal laws effective Jan. 1, 2011 will impact tax withholding beginning with the Friday, Jan. 14, paycheck.
First, the federal income tax withholding tables changed and will generally result in slightly more income tax withheld because the Making Work Pay credit expired on Dec. 31, 2010.
Second, the employees’ share of FICA at 6.2 percent in 2010 has been reduced by 2 percent, to 4.2 percent in 2011. The employees’ share of Medicare remains at 1.45 percent.
Employees may want to consult the IRS withholding calculator or their personal tax accountants to determine if they need to revise their form W-4 to ensure enough income taxes are withheld to cover the tax liability. The withholding calculator is located on the IRS website: Payroll Calculator.
The 2011 W-4 form is now available; completed forms should be returned to the Payroll Department in Room 221, Aquinas Hall.