Update (L4) Payroll Tax Tables for 2012

The U.S. Internal Revenue Service has published payroll tax withholding amounts that are applicable for wages paid in 2012.

If you use DDMS Payroll, update your payroll parameters now to reflect new tax withholding rates.

How Do I Update Tax Tables for 2012?

For illustrated details, see Setting (L4) Federal Payroll Taxes for 2012 (pdf). More »

Does this apply to me?

This only applies to dealers who use the DDMS Payroll application to pay employees who earn wages and pay federal taxes in the United States.

When Should I Do These Steps?

AFTER you close Payroll and print W-2s for 2011,

But BEFORE you run your first payroll for 2012.

What Are Some Key Changes for 2012?

A Temporary Payroll Tax Cut Continuation Act of 2011 temporarily continues the the Employee tax rate for Social Security at 4.2% until Feb. 29. On March 1, the employee tax is raised to 6.2%, equal the Employer Social Security rate.

The Maximum Social Security Amount is $110,100.

The Federal Dependent Allowance is now $3800.

For illustrated details, see Setting (L4) Federal Payroll Taxes for 2012 (pdf).

What About the Extra Row?

To comply with new tax tier introduced in 2010, DDMS 8.22 added a 9th row to the (L4) parameter screen.

However, the IRS has not used the extra tier of tax withholding rates since 2010.

Please keep the extra row filled with 9s, and use the top tax amounts and percentages in that row.

Where Can I Get More Information?

See Year-End FAQs on 2011 Tax Reports and First Payroll of 2012.

Please note, you are responsible for determining exactly how the tax laws affect your payroll.

Consult your accountant and the IRS Publication 15 (Circular E) Employer's Tax Guide for 2012 (http://www.irs.gov/pub/irs-pdf/p15.pdf).

866-374-3221 • https://support.ECiSolutions.com • ddmssupport@ECiSolutions.com