2013 Tax Changes
Now that Congress has made some decisions about 2013 tax rates, Human Resources has compiled information for the campus to explain changes employees may see on their 2013 pay stubs.
Social Security Rate Changes
The Social Security Administration (SSA) announced that the 2013 social security wage base will be $113,700. This is an increase of $3,600 from the 2012 wage base. As in prior years, there is no limit to the wages subject to the Medicare tax; therefore all covered wages are still subject to the 1.45% taxes.
FICA Rate Changes
The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, will be 7.65% for 2013 up to the social security wage base. The maximum social security tax employees and employers will each pay in 2013 is $7,049.40. This is an increase of $2,425.20 for employees and $223.20 for employers. Note that the Social Security rate for employees is returning to 6.2% from the 4.2% rate that was in effect as part of the Middle Class Tax Relief and Job Creation Act of 2012. This change will be reflected in your January 2013 paystubs.
New for 2013: Wages paid in excess of $200,000 will be subject to an extra 0.9% Medicare tax. Once an employee reaches this threshold, an additional 0.9% in Medicare taxes will be calculated.
The IRS has created the following website with questions and answers about the additional 0.9% Medicare tax.
· Visit the IRS website
Federal Income Tax
On January 2, 2013, the American Taxpayer Relief Act of 2012 (ATRA 2012; H.R.8) was signed into law. The new law makes the 2012 tax rates permanent for taxpayers with a taxable income of $400,000 or less. The law increases the top rate from 35% to 39.6% for taxpayers with taxable income over $400,000.
Until the IRS publishes the new rates, Georgia Tech will continue to use the 2012 tax rates. The IRS may make slight adjustments to the tax brackets; however, most employees may not experience any changes from 2012.
2012 W2s – New Information to Report
New - BOX 12 DD: This year, Georgia Tech is required to report the cost of medical coverage in Box 12-DD on the W2. This is the amount paid by Georgia Tech as well as the premiums deducted from the employee’s payroll. This amount is information only and not taxable. It is only medical coverage and does not include dental or vision insurance.
Box 12 W: This box contains the Health Savings Account amount contributed by the employee and the match by GT. Use your last paystub to determine the amount you contributed and the amount GT contributed. The amount you contributed can be found under “Before Tax Deductions” and the amount Tech contributed under “Employer Paid Benefits”.
2012 W2 Availability
W2s will be mailed to employees on January 31st. The goal of Human Resources is to have the W2s available electronically by January 24th or sooner.
Receive Your W2 Electronically
Your W2 has your Social Security number and other personal information that identity thieves can use to their advantage. If you have not already done so, now is the time to logon to TechWorks (techworks.gatech.edu) and elect to receive your W2 electronically instead of through the mail. If you elected to receive your W2 electronically in the past, you do not have to select the option again this year.
How to receive you W2 electronically
· Logon to TechWorks (techworks.gatech.edu)
· Select Payroll and Compensation Home
· Select W-2/W-2c Consent Form under Taxes
· Check the box to indicate your consent to receive electronic W2 and W2c forms
· Click on the “Verify Identity” button (You will be required to enter your GTID and password again)
· Click on the “Submit” button (You will see a screen that says “Submit Confirmation”)
· Click “OK” and you are finished.
IRS Free File
The IRS will again provide the free file service for taxpayers. Currently, the site has not been updated for filing 2012 taxes. If you are interested, please periodically click on the link below for more information.