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How The Fiscal Cliff Bill Affects Payroll Tax Withholding and Employee Benefits

On January 1, Congress passed the American Taxpayer Relief Act of 2012 and prevented the U.S. from going over the impending “fiscal cliff”.
 

Outlined below are the key ways in which the bill affects HR professionals and employers. Broadly speaking, the legislation:
 

  • Doesn’t include an extension of the 2% payroll tax cut
  • Permanently extends employer-provided education assistance
  • Extends the increase in the monthly tax exclusion for transit and vanpool benefits
  • Permits participants in 401k & similar plans to elect to transfer amounts to a designated Roth 401k account
  • Extends federal emergency unemployment benefits for one year
  • Reinstates and extends the Work Opportunity Tax Credit through 2013
  • Reverses a $600 deduction in the $3,000 credit for child and dependent care that was set to take effect on Jan. 1, 2013.

SHRM members may read the full article by Stephen Miller

For the latest Contingent Workforce News and Trends, visit http://www.emergent.com/news/

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Tags: 401k, Cliff, Compliance, Congress, Contingent, Credit, Employment, Fiscal, HR, Human, More…Law, Payroll, Resources, SHRM, Staffing, Tax, Temporary, Workforce

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