2% Payroll Tax reduction extended for at least 2 months

Congress opted to extend the 2% reduction in Social Security withholding from employees and the similar reduction in self employment tax thru February 29th, setting up another legislative showdown on the subject 2 months from now.

Thru February 29th, the first $110,100 of earnings will be subject to the reduced 4.2% withholding rate. If the reduced rate is not subsequently extended the withholding rate on any wage over $18,350 will be retroactively adjusted to the 6.2% rate or whatever any new law allows.