Tax Change 2019
Federal tax reform continues to be a hot topic as many changes made by the Tax Cuts and Jobs Act (TCJA; Pub. L. 115-97) Although most of the changes in the TCJA took effect January 1, 2018, they will remain in effect through 2025.
Social security and Medicare tax for 2019. The social security tax rate is 6.2% each for the employee and employer, unchanged from 2018. The social security wage base limit is $132,900. The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2018. There is no wage base limit for Medicare tax. Social Security and Medicare taxes apply to the wages of household workers you pay $2,100 or more in cash wages for 2019. Social security and Medicare taxes apply to election workers who are paid $1,800 or more in cash or an equivalent form of compensation in 2019.
Mandatory or involuntary deductions are deductions which an employee has no control. The employer is required by federal and/or state law to deduct a certain amount of the employee’s pay and send (remit) it to an institution or governmental agency for the purpose of satisfying the employee’s debt, or contribution to the employee’s retirement account, or tax withholding.
Listed below are mandatory deductions that must be activated when a qualified deduction order is properly presented:
A court ordered deduction is a garnishment or your wages that is issued to the university. We are obligated by law to withhold from your pay and remit to the appropriate agency on your behalf. Your wages can be garnished because of debts to creditors, federal and state tax levies, bankruptcy, student loans or child support. Sometimes these deductions are based on your disposable income. Disposable income is defined as any salary payment due you minus any mandatory deductions, i.e. taxes, retirement. Whenever we receive a court ordered deduction we do everything possible to notify you in advance of the deduction.
- Chapter 13 Paymernt: deduction determined by bankruptcy court
- Child Support Payment: deduction determined by child support agency or court order
- Garnishments: 25% of your disposable income is deducted
- Student Loan Payments: 15% of your disposable income is deducted
- Tax Levy: deduction is dependant upon table submitted with tax levy
The following groups of deductions are mandated by federal or state laws:
Retirement Contributions (Pre-tax for federal and state withholding)
- Employee Retirement System (1.5%)
- Optional Retirement Plan (5%)
- TIAA CREF
- Teacher’s Retirement System (Currently 5.53%, starting July 1, 2012, will be 6%)
Retirement Contributions – (Not Pre-tax for federal and state withholding)
- GA Defined Contribution Plan (7.5%)
Federal Tax Payments
- Federal Withholding Tax
- Social Security Tax
- Medicare Tax
State Tax Payments
- State Tax
GSU employees may choose from a variety of benefit plans, charitable giving opportunities and transportation needs. Many of the benefit plans are pre-taxed, meaning the premiums are withheld before taxes have been calculated. All elected deductions are for benefit-eligible employees only. Temporary or part-time employees are not eligible to have any of the following deductions withheld from their pay.
|Flex Spending Accts/ Health Savings Acct||Critical Illness|
|Commuter Benefits||Legal Plan|
|Parking/Transit Pass||Retirement- Roth 403b & 457b|
|Retirement- TRS,ORP, 403b, & 457b||529, Recreation, & Charitable Contributions|
Tax change affecting 2013 Payroll
The House and Senate have passed H.R. 8, the American Taxpayer Relief Act of 2012 (ATRA), which includes several changes to tax laws affecting payroll and employment tax administration in 2013. President Obama is expected to sign the bill into law within 24 hours.
Income Tax Withholding Rates
The American Taxpayer Relief Act effectively maintains the reduced income tax rates adopted in 2001 and 2003 for individuals earning up to $400,000 and families earning less than $450,000.
Income above those levels will be taxed at 39.6%, up from 35%. The expanded 15% bracket for joint filers, commonly referred to as the marriage penalty relief, has also been extended. These tax rates have been extended permanently for wages paid after December 31, 2012.
Employee Social Security Tax Rate Returns to 6.2%
The reduced 4.2% rate for employee Social Security taxes that was in effect for 2011 and 2012 has expired.
The employee Social Security tax rate will return to 6.2% for 2013 wages up to the taxable wage limit of $113,700.
Consequently, employees’ net pay under the taxable wage limit will decrease accordingly. The maximum Social Security tax that an employee would pay will be $7,049.40 for 2013.
If you have questions or if you need additional information please contact USGDataHelp and we will be glad to assist you!
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University System of Georgia
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Georgia State University
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