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(Posted by NRA Staff on March 2, 2012 1:48 PM)

Now that Congress and President Obama have signed off on the lower 4.2 percent Social Security payroll tax for employees through 2012, the IRS has released a revised Form 941 so employers can report the taxes.

The 4.2 percent Social Security withholding rate, down from the full 6.2 percent rate in effect prior to 2011, applies only to the taxes employees pay. Employers must continue to pay the full 6.2 percent rate on employees’ wages up to $110,100 this year.

The tax break for employees applies through 2012. Employees are not required to take any steps to receive the payroll tax cut, and the reduced tax will not affect workers’ future Social Security benefits.

The tax rate for self-employed individuals drops to 10.4 percent through 2012, on the first $110,100 in net self-employment income. The rate was 12.4 percent prior to 2011.

Visit the IRS for further details.