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Year 2000 Federal Tax Changes
2008 Federal Tax Changes
Overview
The following information regarding Federal payroll
tax changes is effective January 1, 2008.
For the 2008 calendar year, these changes include the following:
Increase in the Federal Withholding Allowance for 2008
Withholding allowances for self and dependents for 2008 increase to $3,500.
Change the "ANNUAL EXEMPTIONS - SELF" and "DEPENDENTS" fields of the "US"
(federal) record of the Tax Data File to 3500.00. (Reference: Department of the
Treasury, Internal Revenue Service, Notice 1036, Rev December 2007.)
Increase in the Social Security Wage Limit for 2008
The Social Security tax rate remains at 6.2% for employers and employees, but
the wage limit increases to $102,000 of wages paid in 2008. Change the "FICA
TAX WAGE LIMIT" of the "US" (federal) record of the Tax Data File to 102000.00.
(Reference: Notice 1036.)
No Change to the Medicare Tax Rate for 2008
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.)
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.)
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