It has been reported that a tentative deal has been reached to extend the payroll tax cut through the end of 2012 and is expected to be cleared by Congress before the end of this week.
Originally set to expire by the end of February, the deal will keep the 2.0% reduction in the employee's share of FICA tax through the end of 2012.
Thus, the OASDI rate for the employee portion will continue at 4.2% of the first $110,100 of wages (prior to the payroll reduction, the employee's rate was 6.2 %).
We will keep you informed as more details of the legislation become available. In the meantime, if you have any questions on this or any tax matter, please contact your Meaden & Moore representative or Pete DeMarco at (216) 241-3272 or email@example.com.