KXII - Fox - Home - Headlines

What the FICA increase means for your paycheck

By: Nicolette Schleisman Email
By: Nicolette Schleisman Email

SHERMAN, TX - The first paychecks of the new year arrived for many Texomans Friday, and a few of you may be wondering why your paycheck is a little lighter than usual.

When Congress reached its decision on the fiscal cliff, new legislation went into effect immediately. Part of that legislation did not extend the so-called Payroll tax holiday enacted during the recession.

Because the payroll tax holiday was not extended, and was never intended to be permanent, 2% more of your paycheck is now going toward Social Security. For a total of 6.2%.

It is part of the Federal Insurance Contributions Act tax, or FICA. FICA goes towards two different funds; part is for social security, the other portion goes to medicare.

This new legislation returns the Social Security tax to what it used to be in 2008.

We talked to a CPA Friday about what it means to the average tax payer, who makes about $30,000 a year, and gets paid weekly.

"If its in the example you gave of $600 dollars over the course of the year... 10 bucks.. Ya know that's a couple gallons of milk. Every week. That it'll cost you," said CPA, Mel Wittmaack.


Comments are posted from viewers like you and do not always reflect the views of this station.
powered by Disqus
Gray Television, Inc. - Copyright © 2002-2014 - Designed by Gray Digital Media - Powered by Clickability 186538471 - kxii.com/a?a=186538471