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Jan. 7, 2011 | Volume 22, No. 1

FICA reduction

With your paycheck of Jan. 7, 2011, you will see a reduction in your Social Security (FICA) tax withholding rate from 6.2 percent to 4.2 percent on the disability portion of FICA. This reduction is capped at the first $106,800 of wages. The Medicare portion of FICA remains at 1.45 percent.

 

This one-year reduction is the result of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which was signed by President Obama in December.


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