Support : Payroll Tax Info : Federal Tax Changes
The following information regarding Federal payroll tax changes is effective January 1, 2010. For the 2010 calendar year, these changes include the following:
No Change in the Federal Withholding Allowance for 2010
Withholding allowances for self and dependents for 2010 remains unchanged at $3,650. Verify that the "ANNUAL EXEMPTIONS - SELF" and "DEPENDENTS" fields of the "US" (federal) record of the Tax Data File is set to 3650.00. (Reference: Department of the Treasury, Internal Revenue Service, Notice 1036, Rev November 2009.)
No Change in the Social Security Wage Limit for 2010
The Social Security tax rate remains at 6.2% for employers and employees. The wage limit also remains unchanged at $106,800 for wages paid in 2010. (Reference: Notice 1036.)
No Change to the Medicare Tax Rate for 2010
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.)