If you have followed the news over the past couple months, then you are likely aware of the debate in Washington D.C. over the extension of the payroll tax holiday. In 2011, the payroll tax holiday was passed which reduced the employee portion of the social security payroll tax from 6.2% to 4.2%. On Friday December 23, 2011, President Obama signed into law a short-term extension to the payroll tax holiday keeping the employees social security rate at 4.2% through February, 29, 2012. Lawmakers will return in January to negotiate future payroll tax changes.
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