withholding tables 2011 IRS Releases

withholding tables 2011 IRS Releases ; In the wake of Thursday night’s passage of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act, the IRS released the withholding tables for employers to use in 2011. The IRS was unable to issue the tables earlier because of uncertainty over whether the current tax rates would be extended or would expire in 2011.

In Notice 1036, the IRS tells employers to implement the new withholding tables as soon as possible and no later than Jan. 31, 2011.

The 2011 withholding tables reflect not only the continuation of the lower tax rates first enacted by the Economic Growth and Tax Relief Reconciliation Act in 2001, but also the lower Social Security tax rate for employees (4.2%), instituted for 2011 by the Tax Relief act. Employers are instructed to implement the new lower 4.2% Social Security tax rate as soon as possible, and not later than Jan. 31, 2011. They are also instructed to make an offsetting adjustment in a later pay period—but not later than March 31—to correct for any overwithholding of Social Security tax that may result from a failure to adjust for the 4.2% rate at the start of the year.

The notice also reminds employers of two expired tax items that were not extended by the Tax Relief bill. The making work pay credit expires at the end of 2010, so there is no adjustment for the credit in the 2011 tables and no longer an additional withholding adjustment for pensions. The option of receiving advance earned income credit payments also expires at the end of 2010. For the latest updates PRESS CTR + D or visit Stock Market news Today

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