IRS Updates 2013 Income Tax Withholding Tables
Updated federal income tax withholding tables for 2013, which reflect legislation signed Jan. 2 by President Obama, were released Jan. 3 by the Internal Revenue Service in Notice 1036.
The tax brackets in the updated tax withholding tables are 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, and the newest, 39.6 percent. The withholding tables should be implemented no later than Feb. 15, IRS said.
Congress approved the legislation (H.R. 8) late Jan. 1, extending the tax cuts for most workers and retaining 2012 rates for all but the highest tax bracket, which increased for individuals with taxable incomes of more than $400,000, and $450,000 for married couples.
With the tax rates remaining relatively stable, most employees will not see an increase in their federal income tax withholding for 2013, and many will see a slight decrease because of adjustments for inflation.
Employees will however see an increase in their tax rate for the Social Security portion of the Federal Insurance Contributions Act taxes increased to 6.2 percent, the notice said. The temporary payroll tax cut expired Dec. 31.
Employers also are to withhold an extra 0.9 percent of Medicare tax when wages paid to employees exceed $200,000, the notice said.
The IRS has instructed employers and Payroll Processors to continue using the 2012 tables until the new tables are released.