With the re-election of President Barack Obama, Congress will need to determine whether to extend the federal income tax cuts launched by former President George W. Bush, under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). The Bush Tax cuts encompassed a two-percentage-point cut of the federal Social Security tax that was part of an economic and jobs package enacted at the end of 2010. In February 2012, Congress approved an extension of the tax cut through the end of the year (December 31, 2012). With the expiration of the Bush Tax Cuts, most businesses may be impacted by the Fiscal Cliff. Stay tuned as further updates are released. Employers should review and update their payroll systems to address any changes and inform their employees how their paychecks may be impacted.
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