Payroll Tax Cut Extended

On February 22, 2012, the Middle Class Tax Relief and Job Creation Act of 2012 was enacted to extend the 2% Social Security payroll tax reduction to the end of 2012. The Temporary Payroll Tax Cut Continuation Act of 2011, passed in late December, temporarily extended the provision that was due to expire at the end of 2011.

There is no action required by employees to received the payroll tax cut and self-employed individuals will report the reduced rate on their 2012 tax return. The new law also repealed the 2% recapture tax was included in the December legislation.