Tax Relief Act—Changes for 2011
On December 17th 2010, President Barack Obama signed into federal law the Tax Relief Act, Unemployment Insurance Reauthorization and Job Creation Act of 2010. This legislation includes important tax changes that affect all employees.
The most significant changes include the following:
- A 2% reduction in the employee portion of social security tax from the current 6.2% to 4.2% for one year. The employer rate for social security tax remains the same at 6.2%.
- A two-year extension of all current tax rates.
All employers must be in compliance with the income tax withholding table change no later than January 31, 2011. Potentially, participants may choose to defer this 2% into your company’s retirement savings plan. This would apply to 401k plans only and it would need to be elected by the participant directly. If you have questions about this change or need more information, please contact the Participant Information Center at 888-608-2680 (7 AM–5 PM MST, Monday–Friday). Our representatives are always willing to help you.