2013 Income Tax Withholding Tables

As expected, the Internal Revenue Service (IRS) has acted quickly to create new 2013 income tax withholding tables based on the American Taxpayer Relief of 2012 passed and signed into law by the President this week.  

Tax rates for withholding will remain the same for 2013 except for the following taxpayers:

  • Single Filing Status with annual taxable wages in excess of $400,000 – the tax rate will increase from 35% to 39.6% for all wages in excess of $400,000
  • Married Filing Status with annual taxable wages in excess of $450,000 – the tax rate will increase from 35% to 39.6% for all wages in excess of $450,000

Except for the changes noted above, because all other tax brackets have been slightly expanded and the annual withholding allowance value has increased from $3,800 to $3,900, most employees will see a slight decrease in their federal income tax with these new changes.    

These new tables have been updated by Payroll Network on Thursday January 3rd  at Noon.  All payrolls processed after this time will reflect the new federal W/H calculation.  Please note that if you ran a payroll for 2013 prior to these new tables being applied, there will not be any retroactive adjustment  posted to your records.  Any subsequent payrolls you process in 2013 will include the new federal calculation.   

Important Reminder 

The 2% rate reduction in the Social Security tax that was in place for the past two years has been allowed to expire.  This means that all employees will again be paying 6.2% for Social Security.   The annual taxable wage limit for Social Security is $113,700 for tax year 2013, making the maximum tax due $7,049.40 ($113,700 X 6.2%).    Because of this rate increase, most employees will see a decrease in their Net Pay for 2013.

For more information please contact: Michael Thom, Vice President, Tax Compliance   Payroll Network, Inc. Phone: 301-770-4200, email: mthom@payrollnetwork.com.

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