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Gentle reminder; Important tax changes

December 22, 2010 - Payroll, Tax,University and Small Academic Support Services

Keywords: tax, W-4, withholding, IRS

Gentle Reminder

The IRS recommends individuals review their withholding status every year-end and, if necessary, fill out a new W-4 card. Employees can use the W-4 Self Service application to make changes to both federal and state withholding allowances. Please note, however, employees need to submit a paper Form IT-2104 if they wish to have the state withholding different than federal withholding.

Important Tax Changes

Employee Tax Rate for Social Security Reduced

Beginning with the first paycheck in 2011, employees will see a decrease of two percent in the Social Security taxes withheld. This reduced Social Security withholding will have no effect on the employee’s future social security benefits.  The 2011 Social Security wage limit remains unchanged at $106,800.  

For more information please see the IRS December 17 news release.

Federal Income Tax Increased

The federal income tax withholding tables have changed because of recently passed legislation. As a result, employees will see an increase in their federal income tax withheld.

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