Support : Payroll Tax Info : Federal Tax Changes
The following information regarding Federal payroll tax changes is effective January 1, 2013. For wages paid in the 2013 calendar year, these changes include the following:
Increase in the Federal Withholding Allowance for 2013
Withholding allowances for self and dependents increases to $3,900.
Verify that the "ANNUAL EXEMPTIONS - SELF" and "DEPENDENTS" fields of the "US" (federal)
record of the Tax Data File is set to 3900.00.
Reference: Notice 1036 - Early Release Copies of the 2013 Percentage Method Tables for Income Tax Withholding, (Rev January 2013)
Increase in the FICA/Disability Employee Tax Rate for 2013
The FICA/Disability Employee rate increases to 7.65%. Change the "FICA/DISABILITY" field of the "US" (federal) record of the Tax Data File to 0.07650 for the EMPLOYEE TAX RATE. (Reference: Notice 1036)
NOTE: If you have already processed any payroll checks for the 2013 year with the incorrect FICA/Disability tax rate value, you will need to manually correct this before printing any additional checks for 2013. If this is the case, please contact our support Hotline by phone for instructions on correcting this. You can reach Hotline by phone at 714/522-8300 or 770/560-0060.
Increase in the Social Security Base Wage Limit for 2013
The Social Security wage base limit increases to $113,700 for wages paid in 2013. Change the "FICA/DISABILITY - Employee Tax Rate" field of the "US" (federal) record of the Tax Data File to 113700.00 for the EMPLOYEE TAX WAGE LIMIT. (Reference: Notice 1036)
No Change to the Medicare Tax Rate for 2013
The Medicare tax rate remains at 1.45% on all wages, for both employers and employees. There is no wage base limit for the Medicare tax. Keep the amount of the field "MEDI LIMIT" of the Custom screen (option U) of the "US" (federal) record at 9999999 (seven 9's). (Reference: Notice 1036)
Additional Medicare Tax Withholding New!
In addition to withholding Medicare tax at 1.45%, you must withhold a 0.9% Additional
Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar
year. In order to address this, you must make the following changes:
Change the field "CUSTOM FIELD #3 NUMBER" to have a description of "MEDICAREX%" with a value of "900".
Change the field "CUSTOM FIELD #4 NUMBER" to have a description of "MEDIX LIM" with a value of "200000".
Change the field "CUSTOM FIELD #5 NUMBER" to have a description of "ROUNDWH" with a value of "1".
(Reference: Notice 1036)
Advance Payment of Earned Income Credit (EIC) Expired
The option of receiving advance payroll payments of EIC expired December 31, 2011. Individuals eligible for EIC in 2013 may still claim the credit when they file their 2013 federal income tax return.
New Federal Withholding Tables
Sample screens with the new withholding rates follow this notice. These changes should be made to the "US" (Federal) record of the Tax Parameter File. You must access the Single, Married, and Head of Household) screens individually. (Note that for the Federal tables, the values for Single and Head of Household are the same.)