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PAYROLL TAX HIGHLIGHTS

 

YEAR 2011                                      Printer Friendly Version

 

Below, we have summarized the major changes, as of this date, which will affect your payroll tax calculations effective January 1, 2011.

 

Federal Individual Income Tax

 

New Jersey Individual Tax

 

 

 

Rates remained the same for 2011.  Some of the tax bracket amounts have changes slightly after inflation adjustments. There is no phase-out of personal exemptions for 2011. The personal exemption for 2011 is $3,700.  (See schedule 1 for tax brackets, rates and standard deductions).

 

Social Security Tax

 

No change in social security wage base for 2011.  Effective January 1, 2011 the employee Social Security tax rate is reduced to 4.2%.  Social security tax is broken into two sections, Social Security and Medicare.  The following is each section's rate and base for 2011:

 

 

New Jersey individual tax rates remained the same for 2011. The tax rates start at 1.4% with a graduating tax schedule rising to a maximum tax rate of 8.970% (See schedule 2 for tax brackets and rates).

 

Pennsylvania Individual Tax

 

The Pennsylvania individual income tax withholding rate remains at 3.07% for 2011.

 

Philadelphia Wage Tax

 

The withholding rate for Philadelphia City Wage Tax for 2011 is 3.928% (.03928) for residents and 3.4985% (.034985) for non-residents.

 

Social Security

 

 

Medicare

 

 

 

Rate - Employer

Rate - Employee

 

Base

 

Maximum Employer

Portion

 

Maximum Employee

Portion

 

6.2%

4.2%

 

$106,800

 

 

$6,621.60

 

$4,485.60

 

 

1.45%

1.45%

 

Unlimited

 

 

Unlimited

 

Unlimited

 

 

Federal Unemployment Tax

 

Federal Unemployment Tax remains at 6.2% through June 30, 2011.  The FUTA tax rate decreases to 6.0% beginning July 1, 2011. The maximum state credit is 5.4% for a net tax of .8% (.008) on the first $7,000 of wages per employee through June 30, 2011.  The U.S. Dept. of Labor determines credit reduction states for states that have not repaid money it borrowed from the federal government to pay unemployment benefits. Pennsylvania’s maximum state credit is 5.1% in 2011 because it is a credit reduction state. 

 

 

 

 

Pennsylvania

 

The maximum taxable wages for Pennsylvania Unemployment remains at $8,000 per employee.  The surcharge on employer contributions remains at 5.8% (.058).  The employer additional contribution remains at  0.65% (.0065).  New in 2011 is an additional employer interest factor tax of .44% (.0044). The percentage of employee wages required to be withheld as unemployment compensation tax remains at 0.08% (.0008).  This 0.08% tax does not have a wage limit.

 

New Jersey

 

The maximum taxable wages for New Jersey Unemployment and Disability will decrease to $29,600 per employee.  The withholding rate will decrease to .985% (.00985).  The employee percentage for January 1, 2011 to June 30, 2011 is divided as follows:

 

      0.3825%           Unemployment

      0.0425%           Workforce Development

      0.5000%           Disability

      0.0600%           Family Leave Insurance

      0.9850%          

 

 

 

 

 

401(k) Limits

 

The maximum employee contributions will remain at $16,500 for 2011.  Please note that this contribution is limited to the lesser of $16,500 or the percentage of wages specified in your 401(k) Plan document.  The maximum employee contributions for employees age 50 or older is $22,000 for 2011.  The contribution is limited to the lesser of $22,000 or the percentage of wages specified in your 401(k) Plan document.

 

 

Quickbooks

 

Please note that if you have payroll with Quickbooks and you keep current with all the payroll updates, Quickbooks makes the changes automatically.

 

Minimum Hourly Wage

 

                     Amount      Effective Date

  Federal             $7.25          July 24, 2009

  New Jersey       $7.25         July 24, 2009

  Pennsylvania    $7.25         July 24, 2009

 

Who to contact

 

If you have any questions please contact:

 

Fred Schutz

Tax Manager

856-722-5300 ext 201

email:  fred.schutz@hfco.com

 

 

 

The information contained herein is general in nature and is based on authorities that are subject to change.  It is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Haefele, Flanagan & Co., PC to the reader.    This material may not be applicable to, or suitable for, the specific circumstances or needs, and may require consideration of non-tax and other tax factors.  Contact Haefele, Flanagan & Co., PC prior to taking any action based upon this information.  Haefele, Flanagan & Co., PC assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information obtained herein.

FEDERAL PERSONAL INCOME TAX RATES FOR 2011

    

       Taxable Income                              Tax Bracket

                                         But Not                                 

    Over                   Over                                     

    

  Single Individuals

 

 

 

$         -0 -

$    8,500

  10%  of the taxable income

      8,500 -

    34,500

$850 plus 15% of the excess over $8,500

    34,500 -

    83,600

$4,750 plus 25% of the excess over $34,500

    83,600 -

  174,400

$17,025 plus 28% of the excess over $83,600

  174,400 -

  379,150

$42,449 plus 33% of the excess over $174,400

  379,150 -

    Over

$110,016.50 plus 35% of the excess over $379,150

 

    Standard Deduction $5,800

    There is no phase-out of personal exemptions for 2011

 

 Married Filing Jointly and Surviving Spouses

 

 

 

$         -0 -

$  17,000

  10%  of the taxable income

    17,000 -

    69,000

$1,700 plus 15% of the excess over $17,000

    69,000 -

  139,350

$9,500 plus 25% of the excess over $69,000

  139,350 -

  212,300

$27,087.50 plus 28% of the excess over $139,350

  212,300 -

  379,150

$47,513.50 plus 33% of the excess over $212,300

  379,150 -

    Over

$102,574 plus 35% of the excess over $379,150

 

    Standard Deduction $11,600

    There is no phase-out of personal exemptions for 2011

 

 Married Filing Separately

 

 

 

$         -0 -

$    8,500

  10%  of the taxable income

      8,500 -

    34,500

$850 plus 15% of the excess over $8,500

    34,500 -

    69,675

$4,750 plus 25% of the excess over $34,500

    69,675 -

  106,150

$13,543.75 plus 28% of the excess over $69,675

  106,150 -

  189,575

$23,756.75 plus 33% of the excess over $106,150

  189,575 -

    Over

$51,287 plus 35% of the excess over $189,575

 

    Standard Deduction $5,800

    There is no phase-out of personal exemptions for 2011

 

Head of Household

 

 

 

$         -0 -

$  12,150

  10%  of the taxable income

    12,150 -

    46,250

$1,215 plus 15% of the excess over $12,150

    46,250 -

  119,400

$6,330 plus 25% of the excess over $46,250

  119,400 -

  193,350

$24,617.50 plus 28% of the excess over $119,400

  193,350 -

  379,150

$45,323.50 plus 33% of the excess over $193,350

  379,150 -

    Over

$106,637.50 plus 35% of the excess over $379,150

 

    Standard Deduction $8,500

    There is no phase-out of personal exemptions for 2011

 

*See IRS Notice 1036 or Circular E for withholding amounts that should be made through payroll.

 

NEW JERSEY INCOME TAX RATES FOR 2011

 

            Please note that these rates are New Jersey Income Tax Rates, not Withholding Tax Rates. 

 

FOR MARRIED PEOPLE FILING JOINTLY, MARRIED/CU PARTNERS FILING JOINTLY, HEADS OF HOUSEHOLDS

AND SURVIVING SPOUSES

 

Taxable Income                                                                          Tax Rate

 

Not over $20,000

1.4%

$20,001 - $50,000

$280 plus 1.750%

 

of excess over $20,000

$50,001 - $70,000

$805 plus 2.450%

 

of excess over $50,000

$70,001 - $80,000

$1,295.50 plus 3.500%

 

of excess over $70,000

$80,001 - $150,000

$1,645 plus 5.525%

 

of excess over $80,000

$150,001 - $500,000

$5,512.50 plus 6.370%

 

of excess over $150,000

Over $500,000

8.97% of excess over $500,000

 

 

 

 

FOR TAXPAYERS WHOSE FILING STATUS IS

SINGLE OR MARRIED PEOPLE FILING SEPARATE RETURNS, MARRIED/CU PARTNER FILING SEPARATE RETURN

AND ESTATES AND TRUSTS THE RATES ARE:

 

 

Taxable Income                                                                         Tax Rate

 

Not over $20,000

1.4%

$20,001 - $35,000

$280 plus 1.750%

 

of excess over $20,000

$35,001 - $40,000

$542.50 plus 3.500%

 

of excess over $35,000

$40,001 - $75,000

$717.50 plus 5.525%

 

of excess over $40,000

$75,001 - $500,000

$2,651.25 plus 6.370%

 

of excess over $75,000

Over $500,000

 

8.97% of excess over $500,000