Courtney Announces Resources to Help Small Businesses Prepare for New Payroll Tax Cut

Press Release

Congressman Joe Courtney today released resources compiled by the Internal Revenue Service (IRS) to help employers implement the 2011 cut in payroll taxes, along with new income-tax withholding tables that employers will use during 2011.

"The payroll tax cut passed by the House and signed into law by the President will provide families with both an immediate and regular boost in take-home income," said Congressman Courtney. "To make the cut seamless, however, it is important for businesses to have the resources they need to implement the change."

Because of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act Of 2010, millions of Americans will receive a two-percent payroll tax cut, reducing their Social Security tax withholding rate from 6.2 percent to 4.2, and increasing their take-home wages. Employers should start using the new withholding tables and reducing the amount of Social Security tax withheld as soon as possible in 2011 but not later than Jan. 31, 2011

The IRS's notice, which contains percentage method income tax withholding tables, the lower Social Security withholding rate, and related information that most employers need to implement these changes, is available here: http://www.irs.gov/pub/newsroom/notice_1036.pdf?portlet=7

The IRS encourages employers and payroll companies to handle the withholding changes. The IRS also urges workers to review their withholding every year and, if necessary, fill out a new W-4 and give it to their employer. For example, individuals and couples with multiple jobs, people who are having children, getting married, getting divorced or buying a home, and those who typically wind up with a balance due or large refund at the end of the year may want to consider submitting revised W-4 forms. Publication 919, "How Do I Adjust My Tax Withholding?" provides more information to workers on making changes to their tax withholding.

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